Buy-side mergers and acquisition process
Pre-engagement
Timeline: Week 1-2
Agreement on the market capitalization/valuation of the existing business that is intending to do the acquisitions, foundation to determine which acquisitions might meet the return hurdle the share holders require to justify an acquisition.
Engagement & Preparation
Timeline: Weeks 1-4
Develop a solid documented aquistion plan outlining why the business should make acquisitions, and what the desired outcomes are, articulate the M&A criteria in a Tear Sheet setting out the specifics such as company value, industry, geography, revenue, margins, growth, employees, etc.
Go-to-market
Timeline: Weeks 1-6
Use the above criteria to curate and identify an addressable market of potential acquisition candidates and respond to in-bound interest or Teasers from sell-side intermediaries.
In-market
Timeline: Weeks 1-8
This phase involves reaching out to selected companies that meet the criteria and commencing a dialogue with target organizations management.
Management Meetings
Timeline: Weeks 1-14
Once preliminary discussions have taken place a target company will likely provide detailed financial information which can be used to value the company in more detail.
Negotiations
Timeline: Weeks 1-28
After a view on valuation has been established an offer can be made and negotiations will go back and forth
Pre-liminary Decision
Timeline: Weeks 1-29
Board of directors or investment committee of acquiring company decides to proceed (subject to final approval)
Due Diligence
Timeline: Weeks 1-40
Upon successful completion of due diligence the final purchase and sale agreement can be signed (share purchase or asset purchase)
Debt & Equity Funding
Timeline: Weeks 1-40
This may have commenced and occured earlier, but the final strokes of financing will come into place after the deal has been signed but before it closes.
Closing
Timeline: Weeks 1-40
Closing and integration of the acquisition – Finally, the official transaction closes (tombstones are handed out) and the long process of integration begins.
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