The 139-Day Window: What Diligence Duration Says About Deal Outcomes

Most sellers read a long diligence process as a good sign. The buyer is engaged, the questions keep coming, and the data room stays busy. Research covering more than 900 transactions points somewhere less comfortable: the deals that ran longest were not the ones that closed best, and the ones that closed best clustered around a diligence period well short of today's average.

Diligence takes months longer than it used to

The M&A Research Centre at Bayes Business School, working with transaction data from SS&C Intralinks, measured the interval between the moment a virtual data room opens and the moment a deal is publicly announced. Across more than 900 global transactions announced between 2013 and 2023, that interval averaged 203 days. A decade earlier the comparable figure was 124 days. The process now runs roughly 64 percent longer than it did.

The direction has not reversed since. The ION Analytics Best Practices in M&A Due Diligence 2026 report, based on a survey of 150 senior executives at boutique, mid-sized, and large US investment banks, found that one in five respondents saw diligence timelines extend over the prior two years. Among that group, 57 percent said the process had absorbed an additional one to three months. Looking ahead, 73 percent expect diligence to become more complex over the next 12 to 24 months, with 15 percent expecting it to become considerably more so.

For a business owner, this is not an abstract industry statistic. It describes how long the most demanding phase of a sale now runs, while the company still has to be operated, staffed, and grown.

The finding that runs against instinct

The notable part of the Bayes work is not that diligence got longer. It is what happened to deals at different durations.

Transactions with medium-length diligence, averaging around 139 days, showed the highest completion rates. They also carried the lowest premiums. During those reviews, the target's price moved roughly 22 percent. For deals with unusually short or unusually long diligence periods, the comparable figures were 30 percent and 33 percent. Medium-duration deals went on to deliver the strongest total shareholder returns for the acquirer, in the range of 4 percent above market, while the short and long ends of the distribution more often produced adverse outcomes.

That result deserves a careful reading, because the causation runs in more than one direction. A deal does not become better because someone shortened the calendar. A diligence process that resolves in about four and a half months is usually a signal that the underlying company was well prepared, the information was clean, and the parties agreed on what they were looking at. A process that stretches past six or seven months is often a symptom: something surfaced, something is unclear, or the buyer is taking time it has no reason to give back. Duration is visible evidence of a condition that already existed.

That distinction matters for how an owner should use the finding. The goal is not to compress diligence artificially. It is to remove the conditions that cause diligence to run long.

Why the clock keeps expanding

The workload has grown, and it has shifted.

For most of the last decade, financial diligence set the pace. A buyer commissioned a quality of earnings analysis, which stress-tests reported profit to separate durable, repeatable earnings from one-time gains and accounting choices, and the timetable followed that work. Financial diligence remains foundational, but it is no longer the bottleneck.

Technology diligence has moved to the front. In the ION Analytics survey, 47 percent of respondents named it their main priority over the prior 12 months, and 51 percent identified it as the single most burdensome element of the entire review. Cybersecurity is following the same path: 84 percent anticipate greater scrutiny over the next 12 to 24 months, with 43 percent expecting significantly greater scrutiny.

Alongside those, buyers now run parallel workstreams that barely existed a few years ago. They examine customer concentration and the durability of recurring revenue. They test whether reported EBITDA add-backs would survive an outside challenge. They assess how exposed the business model is to artificial intelligence, both as a competitive threat and as an unmanaged internal risk. They evaluate whether the management team and its institutional knowledge actually transfer to a new owner, or leave with the founder.

Each of those is a defensible line of inquiry. Together they explain the arithmetic. A process that once ran three or four workstreams now runs seven, and the sequencing rarely gets compressed to match.

What a stretched timeline costs a seller

Time is not a neutral input in a sale process. It carries real cost, and most of that cost lands on the seller.

The business drifts. An owner spending two-thirds of their attention on a data room is not spending it on customers, pipeline, or hiring. If performance softens during diligence, and it frequently does, the buyer sees the softness in the monthly numbers and reprices accordingly. Nothing in the agreement protects a seller from their own distraction.

The financing environment moves. A buyer's debt commitment carries an expiration date. Rate expectations, credit spreads, and lender appetite shift over a seven-month window in ways they do not over a four-month one. Deals that were financeable in month one are occasionally not financeable in month eight, on identical business fundamentals.

Information leaks. The longer a process runs, the more people know. Employees notice the unfamiliar visitors and the closed-door meetings. Key staff start returning recruiter calls. Customers hear something. The risk compounds with duration.

Negotiating leverage erodes. Sale processes are strongest when multiple parties move on a shared timetable. As a process extends, competing bidders drop away, the seller becomes invested in the remaining buyer, and the practical cost of walking away rises. A buyer who is in no hurry understands this.

Fatigue changes decisions. Owners eight months into a process approve concessions in month nine that they would have declined in month three. Diligence findings that would have drawn a firm response early become negotiating chips late.

Keeping a process inside the window

The variables an owner controls sit almost entirely on the front end, before a buyer is at the table. Most of the work below is a matter of preparation rather than negotiation, and it can be done well in advance of going to market.

What to watch

Two developments are worth tracking over the coming quarters. The first is whether artificial intelligence tooling actually shortens diligence or simply expands its scope. Buyers can now review contract populations and financial detail far faster than they could two years ago. That capacity can compress the calendar, or it can be spent examining material that previously went unexamined. Early evidence points toward broader review rather than faster review.

The second is the widening gap between prepared and unprepared sellers. As buyer workstreams multiply, the timeline difference between a company with a current data room and one assembling documents on request grows. That gap increasingly shows up in the price, because a buyer who spends seven months on a review has both the information and the leverage to reprice at the end of it.