When Should I Send my Financials to a Buyer of my Business?
When Should I Send My Financials to a Buyer of My Business?
You are ready to open the data room on your iGaming company, yet the first serious suitor is already asking for the numbers — and you have not even shaken hands. As an M&A advisor who has spent the last decade closing deals from white-label casino platforms to sportsbook suppliers, here is how I frame the timing of financial disclosure.
A signed non-disclosure agreement (NDA) is the immovable starting line. Most professional acquirers expect a short “no-names teaser,” sign the NDA within 24 hours, and immediately request high-level figures so they can decide whether to devote bandwidth to the opportunity. Reputable buyers respect that rule because they run the same process when they sell portfolio assets themselves.
Once the NDA is executed, sellers typically circulate normalized (a/k/a “adjusted”) statements: three years of profit-and-loss, a trailing-twelve-month (TTM) view, and an explanation of owner add-backs. That package is often embedded in the Confidential Information Memorandum (CIM) or uploaded to a virtual data room (VDR) with restricted, water-marked access logs.
Yet handing over the full ledger on day one is rarely advisable, especially in a hyper-competitive niche such as iGaming where revenue by geography, player acquisition cost, and bonus liability are commercially sensitive. The solution is a phased release strategy (sometimes branded the “go-dark” or “controlled-light” approach).
A Practical Phased-Release Framework
| Phase | Commitment Signal from Buyer | Key Financials Shared | Typical Safeguard |
|---|---|---|---|
| 1 – Teaser Review | Executed NDA, credentials supplied | 3-year revenue, EBITDA, headline KPIs (GGR, NGR, active players) | Water-marked PDF; VDR view-only |
| 2 – Management Call | Buyer clarifies strategy & funding source | Detailed P&L, balance sheet, marketing spend break-out | Tiered permissions in VDR |
| 3 – Site Visit / LOI Draft | Verbal price range, diligence list submitted | Monthly revenue by market, player cohorts, cash-flow model | Escrowed earnest-money or expense deposit |
| 4 – Confirmatory Diligence | Signed LOI, exclusivity period | Full working-trial balance, contracts, tax files | Audit-trail VDR + redaction rights |
This cadence limits exposure while giving bona-fide acquirers enough data to price the asset. It mirrors the three-stage VDR methodology widely used across M&A.
Screening the Buyer (and Letting the Buyer Screen You)
A two-way qualification process builds trust. I request a short buyer profile (fund size, previous gaming deals, proof of funds) before phase-2 materials go live. Experienced acquirers gladly comply; unwillingness is often the earliest red flag.
Conversely, be prepared for the buyer’s accountants to benchmark your numbers against jurisdictional licensing logs, payment-processor reports, and AML compliance files. Normalized statements that reconcile owner perks or non-recurring costs make their job easier and keep valuation debates narrowly focused.
Managing the Data Room — On-Premise or Cloud?
A dedicated, access-controlled VDR is now the de-facto standard. Sophisticated platforms allow real-time revocation of privileges and document self-destruct features, which are superior to old-school “war rooms” stuffed with banker boxes. Small operators sometimes prefer an office-only computer with read-only files; it works, but you lose the audit trail and analytics that a modern VDR provides.
Pros and Cons of Early Disclosure
Pros
Signals transparency and professionalism, often accelerating credible bids.
Lets buyers calibrate diligence budgets early, avoiding wasted cycles.
Can strengthen your leverage if multiple suitors see robust metrics simultaneously.
Cons
Leakage risk: sensitive KPIs could reach competitors or affiliates.
Creates “number anchoring”; an early snapshot may understate near-term upside if your growth is steep.
Increases administrative load: every extra document invites another follow-up question.
Balancing these factors is why the phased model tends to outperform an “all-at-once” dump.
Frequently Asked Questions
Q1 Do I ever send raw accounting exports?
No. Always reconcile to adjusted GAAP or IFRS formats; raw exports without context invite misinterpretation and valuation haircuts.
Q2 Is three years of P&Ls enough for an iGaming deal?
Three full fiscal years plus TTM is market standard. If your vertical experiences marked seasonality (e.g., World Cup spikes), monthly granularity is recommended.
Q3 Can I refuse a buyer’s request for cohort data before the LOI?
Yes. Cohort or player-level analytics are usually held back until exclusivity. Offer a summary churn curve instead. Serious acquirers will accept that boundary.
Q4 What if the buyer is also a competitor?
Increase the earnest-money requirement, shorten the diligence window, and watermark every page with the buyer’s legal entity name to deter leaks.
Q5 When does the NDA expire?
Most NDAs survive two to three years post-closing or formal termination of talks; negotiate a tail long enough to cover redeployment of the data.
Conclusion
In the iGaming arena, where player databases, traffic sources, and bonus mechanics are core intellectual property, releasing financials is not merely an administrative step — it is a calibrated negotiation lever. Begin only after an NDA, progress through a disciplined phased-release timetable, and insist on reciprocal transparency from the counter-party. Handle the process well and your P&Ls will serve not just as historical record but as a compelling story that justifies premium value.
