Buy-side m&a process
Hey guys, I Need some help. I understand that this is the typical sell-side process:
Winning the mandate - This phase includes creating the pitch, the actual pitch, the signing of the engagement letter, and any preliminary calls with management to learn more about the company.
Marketing - This phase includes receiving initial documents from management, setting up a data room, creating the marketing materials (teaser and CIM), and sending out the teaser together with the NDA. If the potential buyer signs the NDA, you send them the Information Memorandum. You will also set up your valuation model at this point.
Indication of Interest - The potential buyers may come back to you with follow-up questions and request a call, possibly with management. The amount of information apart from the CIM given to potential buyers is usually very limited at this stage. Potential buyers will then submit their IOIs.
Letter of Interest - This step usually starts with selecting a select few potential buyers who submitted an IOI to attend management presentations. There may be site visits involved here too. At this point, you will have set up a formal data room that is being populated with a base level of information. Almost all potential buyers will have specific follow-up requests and might even request additional calls with management. Potential buyers now submit an LOI.
Final due diligence and closing - You now select one potential buyer with whom to move into exclusivity. This potential buyer will send you a detailed due diligence list to be answered. Third party advisers usually get involved at this point to run their own diligence process (e.g. quality of earnings, environmental assessments, benefits analysis, insurance analysis, etc.). One party will start drafting a purchase agreement, and then your client's counsel and the potential buyer's counsel will trade edits. You then finalize the diligence process and sign the purchase agreement.
But how does the buy-side process look like?
Thank you, I appreciate it!
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