Buy-side 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 shareholders require to justify an acquisition.
Engagement & Preparation
Timeline: Weeks 1-4
Develop a solid documented acquisition 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 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 occurred 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 lengthy process of integration begins.
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