Selling your pharmacy | Timescales
17 July 2020
You’ve made the decision to sell your pharmacy so how long does the process take and when can you expect to have the money in your bank?
If you haven’t downloaded our Roadmap to Selling yet, then click here for your copy to help guide you through the process.
Timescales when selling your pharmacy
Stage 1 | 0 weeks
Once you have appointed a Sales Agent the timescales are typically as follows, although like any legal complicated process, this can vary if unexpected issues come to light.
Stage 2 | 2 – 4 weeks
Assembling all the relevant documents
Stage 3 | 4 – 6 weeks
Marketing your pharmacy – depending on the interest in your pharmacy this period may be shorter or could extend if the sales market is in a trough. Your agent will advise you.
Stage 4 | 1 week
Review the offers and decide on the one you wish to accept.
Your agent will draw up a Heads of Terms document for both seller and buyer to sign which will instruct their respective lawyers as to the bones of the deal.
Stage 5, 6 & 7 | 8 – 12 weeks
The legal process is complicated and each parties solicitors are trying to get the best deal for their clients so an amount of negotiating on the Asset Purchase Agreement (APA) or Share Purchase Agreement (SPA) is normal.
Landlords will also fall into this area for the assignment of the lease or if Freehold, a valuation. Dealing with landlords can be difficult and time consuming so if you know them well, letting them know in advance you are selling and who the prospective buyer is would be very helpful. The buyers funders will also require a valuation of the business.
Stage 8 & 9 | Up to 4 months
This stage depends on the deal – an Asset deal requires a Change of Ownership which takes around 3 -4 months unless a Management Agreement is put into place whereby the transaction can happen sooner. A Management Agreement allows the new owner to operate the pharmacy on your behalf whilst the Change of Ownership is processed. You are still personally responsible for any legal issues with regards to the pharmacy but the new owner operates it and retains the income. A Share deal (Company Sale) can be completed a lot quicker. The stocktake is competed the day prior or the day of completion.
Stage 10 | 2 weeks to 3 months
If an asset deal then stock is paid for within 2 weeks and your money for the sale will be in your bank on completion.
If a Company deal although you are paid for all of the share value on completion, the stock value is tied up with the completion accounts as an adjustment and completion accounts generally take around 3 -4 months to complete. This when you would get your money for the net current assets. Your accountant can work out an approximate value of the net current assets that could be used on day one and then adjusted after 3-4 months.
Some of the above stages can be run together so it’s not quite as bad as it looks!
The process as a whole
In summary then typically a deal is between 20 and 30 weeks, one difference between the types of deal is the Change of Ownership but if you are happy to submit this early into the legal process this cuts down on the time but, the sale will then be in the public domain so your staff may find out – usually from your wholesale delivery driver !!
Work with the pharmacy specialists
All of this may seem like a lot of work but Pharmacy Seekers can assist you with many of these tasks. You will want the best price for your pharmacy and preparation is the key to promoting and subsequently selling your pharmacy.