Timeline of an M&A deal?
I finished my freshman year and I've been working at a boutique shop for a couple weeks now this summer and have gotten great experience. I am, however, a little confused on the timeline of an M&A deal because I've worked on multiple deals that are all in different stages of the process. I've helped build LOI comparisons from potential buyers to present to our engagement. I've also worked on numerous CIM's to potentially give to buyers that encompass our client. I have also done some (not as much) work on pitch books. I know what each of the previous things are of course because I've worked on them. The pitch book comes first and is soliciting our services to gain the client. The CIM is after we have the client and are building a presentation encompassing them. The LOI talks about the buyers intended purchase price and valuation. I have not, however, worked on teasers, and don't exactly know those function other than being a consolidated CIM? I also would like more insight as to when an NDA comes in? Or when is the due diligence period? Would someone be willing to give me sort of a brief timeline of when the previous components come into place? (I think I'm just not getting the overall picture because my work has been very fragmented) Can someone also explain what their role is in pushing the deal forward? Thanks for helping out the intern!
Assuming you mean from a sell side advisor's perspective. Roughly: -Pitch -Get mandate from client -Prepare teaser and CIM -Reach out to potential bidders with teaser -Sign NDA with potential bidders -Send CIM to potential bidders -Bidders submit LOI/term sheet -Pool of bidders narrowed down to a few or one based on proposed terms -Bidders do DD, usually bringing in external advisors i.e. lawyers, bankers, consultants, accountants et al -In parallel with DD, negotiation between buyer and seller on definitive agreement/SPA -If DD and negotiations go well, deal signing -Both sides work on fulfilling conditions precedent to completion which most SPAs will have -Once all CPs fulfilled, deal completion
+1
You forgot the best part: designing deal toys.
How much time/resources it takes for an M&A deal (Originally Posted: 06/12/2012)
Hello, I am interested in knowing how much average time it takes for an M&A deal from conception to completion. -How many people work on it; like who actually gets to do the deal, and what do analyst/ associates/VP's work on. -Do Investment banks recommend companies or companies think about investments and then come to the bank for getting advised. -what are the fees that banks get for advising on a successful merger/acquisition. How do they decide on the fees.
Thanks
With all due respect, but could you possibly be a little bit more vague or generalizing? That's like asking how long it takes to prepare a meal when you can either have some microwavable Jimmy Dean's breakfast bowl or a top-notch filet mignon at a restaurant abroad. And if you do the latter, shall the chef just go purchase the meat or raise the cow first? Do you want to pay cash or do you need to apply for a credit card first? And do you also want to get a fairness opinion on the cow's health?
Agreed. There is too much here to respond in detail.
Usually 2-3 junior bankers, 1 VP/SVP and an MD (all depends on the bank as well as the size and complexity of the deal).
Sometimes MD's will pitch new business to clients and sometimes companies will bring in banks for a bakeoff. Focus depends a lot on dealflow, client relationships, etc.
Fees vary. Closer to 1.5% + step-up deal for M&A transactions.
According to wallstreet training, approximately 30 weeks.
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