Houston · Offers & due diligence
Which Houston business sale firm will manage due diligence through closing?
What happens between a signed letter of intent and funds wired, who runs each step, and what a Houston owner should expect from an advisor.
By Michael D. Rubin, CEO & Founder · September 2026 · 909 words
MDR & Associates manages the full back half of a Houston business sale, from the signed letter of intent through due diligence, the legal documents and the day funds are wired, with a principal of the firm in every negotiation. Our corporate office is in Frisco, and our advisors come to you, meeting at your company or somewhere discreet. This article explains what that stage involves and what to expect from whoever manages it.
Most owners focus on finding a buyer. The harder work often starts after one is found. A letter of intent, or LOI, is a short, mostly non-binding document that sets out the price, structure and key terms a buyer proposes. It usually gives the buyer a period of exclusivity to check the business before signing a final agreement. Deals are won or lost in that window.
Due diligence is where a buyer verifies everything you have told them
Due diligence is the buyer's investigation of the company before committing money. For a company with $3 million to $100 million in revenue it typically covers financial, legal, tax, operational, customer, employee and environmental questions. The buyer sends a request list, often a long one, and expects documents organized in a secure online data room.
Many buyers, especially private equity groups, also commission a quality of earnings report. That is a review by an outside accounting firm that tests whether the adjusted EBITDA you presented holds up. EBITDA means earnings before interest, taxes, depreciation and amortization; adjusted EBITDA adds back owner expenses and one-time costs that a new owner would not carry. If the review finds a lower number, the buyer will try to lower the price. That is why the financial recast prepared before marketing matters so much: it has to survive a second, skeptical look.
Who does what between the LOI and closing
| Stage | What happens | Who leads it |
|---|---|---|
| Data room | Documents gathered, indexed and released in stages | Advisor organizes; owner and CPA supply |
| Financial review | Buyer and its accountants test revenue, margins and add-backs | Owner's CPA answers; advisor manages the questions |
| Operational review | Site visits, customer and supplier checks, key employee conversations | Advisor schedules; owner hosts |
| Purchase agreement | Final price terms, representations, indemnities, escrow | Transaction attorneys draft; advisor negotiates business points |
| Closing checklist | Consents, lender conditions, closing balance sheet | Advisor keeps the list; attorneys and CPA complete items |
| Closing | Signatures, funding, transfer of ownership | Attorneys and lender; advisor holds the timeline |
What a good advisor does to keep the deal from falling apart
The risk in this stage is time. Every week of diligence gives a buyer another chance to find a reason to renegotiate, and gives the market, the lender or a key customer a chance to change. A firm that manages this stage well should do the following. Common failure points are covered in what causes a business sale to fall apart in due diligence.
- Prepare the data room before the LOI is signed, so answers go out in days, not weeks.
- Disclose known problems early and in writing, instead of letting the buyer discover them.
- Keep one calendar of deliverables for the buyer, the lender, the attorneys and the CPA, and chase every open item.
- Control what is released and when, so customer names, pricing and employee details go out only once the buyer is committed.
- Answer renegotiation attempts with facts from the recast rather than giving ground by default.
- Keep the owner running the company. A business whose results dip during diligence invites a price cut.
The last weeks before closing
As diligence winds down, a closing checklist takes over. Common items include consents from landlords, customers or suppliers whose contracts need approval for a new owner; the buyer's lender finishing its own review; license and permit transfers; arrangements for key employees; and an estimated closing balance sheet.
That balance sheet matters because of the working capital peg. Working capital is roughly receivables plus inventory minus payables. The peg is the normal level both sides agreed the company will have at closing. If the actual figure comes in short, the price drops by the difference. A funds flow statement then shows exactly who receives what on closing day: you, lenders being paid off, any escrow, and the advisors. You should see and understand it before you sign anything.
Selling a Houston company with the advisor based in Frisco
Houston companies draw interest from national strategic buyers and private equity groups, particularly in industrial, energy-related, distribution and service businesses. Those buyers run disciplined diligence with outside accountants and counsel, and you need someone on your side running an equally disciplined process. Distance does not change that work. Most diligence happens through the data room and scheduled calls, and our advisors travel to Houston for the meetings that need to happen in person. You can read more about how we work with Houston owners.
How MDR & Associates runs the back half of the deal
Due diligence, legal documents and closing are steps eight, nine and ten of our ten-step process. A principal of the firm stays in every negotiation, including the ones that come up late, and we work alongside your own transaction attorney and CPA rather than replacing them. The whole sale typically takes three to nine months from engagement to funds wired. Our fee is a success fee, paid only if the company sells. To start, reach us through our Houston contact page or get a free valuation snapshot.
Where this fitsHouston business brokers and M&A advisors →