Acquisitions Closing Process
Hey guys, was hoping I could have some help with the following process. I have only ever underwritten deals and not necessarily closed them. Was hoping that someone could help me understand the steps of the closing process in simple form - what is involved and what needs to be negotiated?
Is this expected at the associate level?
Hey there! Based on the most helpful WSO content, the closing process in acquisitions, especially in real estate, can be quite involved. It typically includes several stages, such as:
Due diligence: This involves checking all the details of the property or business you're acquiring. This could include appraisals, property condition reports, zoning, and more. Every firm has their own list of items to check.
Investment committee meetings/presentations: During the due diligence process, you'll likely have several meetings with your investment committee and deal team. You'll also have conversations with brokers, lawyers, and others involved in the deal. Your job is to understand the details of the deal so that the managing director (MD) can make an informed decision.
Legal review: Your deal team will work with outside legal counsel to review the Purchase and Sale Agreement (PSA) and any other documents that have a lot of legalese. You may also need to draft a Joint Venture (JV) contract/document to formalize your partnership with your selected capital partner.
Finalizing the deal: If it's a development deal, there are many more steps, such as entitling the land, conducting additional testing/reviews, working with architects/general contractors, getting plans submitted and permits pulled, building the building, pricing, marketing and leasing the building, managing it, and then eventually selling it.
As for your question about the associate level, it can vary from firm to firm. At larger firms, a special due diligence team might handle most of this, with the acquisitions team providing support. At smaller shops, this could be entirely up to you and your deal team.
Remember, every deal is unique and may require different steps. But hopefully, this gives you a good starting point!
Sources: Life in Acquisitions (Analyst/Associate), Sellside / Buyside M&A Process "Checklist"
What jurisdiction are you in?
Spv / Asset deal?
Debt on closing?
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