Buy Side M A Process
CLICK HERE ===== https://urlca.com/2tDaXv
As investment bankers, RKJ Partners, LLC possesses a breadth of knowledge and experience in advising buyers on business acquisitions. In our latest blog installment, we outline the eight basic steps involved in the buy side M&A process and related insights to assist in a successful execution.
6. Conduct Due-Diligence. Formal due-diligence is a detailed investigation of all issues that need addressing before four simple questions can be answered: Should the buyer make this acquisition How much should the buyer pay for the business How should the acquisition be structured How should the buyer deal with any post-acquisition operating, accounting, and legal issues It is critical that the buyer has experienced professionals on the deal team to assist in facilitation of the due-diligence process.
The Confidentiality Information Memorandum (CIM) contains confidential information about the company. This document allows the potential buyer to understand the target in-depth and decide whether they would like to buy the business or not. They also decide on the valuation of the company by looking at the same. The CIM contains information such as an industry overview, company profile, financial statements, revenue profile, employee profile, products and service offerings, office locations, management structure, key customers, competitive strength, investment rationale, etc. The role of the sell-side M&A banker is to prepare a complete CIM and make the company look attractive.
It is very important for the buyer to conduct due diligence and satisfy themselves regarding the capabilities of the company, the financials, and legal contracts. The bankers upload all kinds of data for potential buyers to verify and discuss. Data uploaded varies on matters relating to corporate information, employees, material agreements, service agreements, financials, tax, regulatory issues, IT & system management, etc. If the buyer is looking for any specific set of data points, it sends a request to the sell-side M&A banker in a specific format. The banker coordinates with the seller and uploads the requested information.
Once the negotiation is completed and a consensus decision about the valuation and other key parameters is reached, companies sign the definitive agreement, which is prepared by the lawyers. The role of the sell-side M&A banker is to look for the purchase price, with a special focus on working capital requirements. As far as legal clauses are considered, the bank may form a legal team to advise the sellers, or the sellers may hire a law firm from outside to assist with the agreement.
Included on this page, you'll find a step-by-step process for buy side with templates, a step-by-step process for sell side with templates, best practices for executing an M&A deal, and key M&A terminology.
The phrase mergers and acquisitions (M&A) refers to the consolidation of multiple business entities and assets through a series of financial transactions. The merger and acquisition process includes all the steps involved in merging or acquiring a company, from start to finish. This includes all planning, research, due diligence, closing, and implementation activities, which we will discuss in depth in this article.
The length of the M&A process can take anywhere from six months to several years, depending on the complexity of the deal. While it can be helpful to draft a timeline and target a closing date for tracking purposes, understand that delays are inevitable, so build in time for change.
Also known as a bid process letter or bid procedure letter, an M&A process letter accompanies the confidential information memorandum (CIM) in an M&A auction. The process letter typically provides information on the M&A auction schedule, instructions, and contact information for all future communication, as well as any terms that the bidders must include if they make an offer.
The sell-side mandate is the first step in selling a business. The mandate states that an owner is selling a company, considering the sale, and an advisor will handhold the company. While the advisor is handling the company, the sell-side M&A team will be looking for a buyer.
Once the owner decides to sell the company, there are four ways that the seller can proceed with the M&A process and sell their business. The four options are a broad auction, a limited auction, a targeted auction, or exclusive negotiation.
This process retains the most confidentiality and minimizes disruption to the company. However, by excluding potential buyers, there is a chance that the seller may not receive the maximum sell price.
Navigating the sell-side M&A process without assistance can be a daunting task. Sell-side advisory services can provide the help needed to ensure that the process runs smoothly. Sell-side advisory services help maximize the selling price of a company.
A shining example in the field of sell-side advisory services is RBS. Rogerson Business Services offers dedicated M&A sell-side advisors, ensuring that sellers will have the best experience possible. Many of the advisors employed by RBS are business managers themselves, meaning they have first-hand experience on both sides of the M&A process.
Based in California, RBS, Rogerson Business Services has over 35 years of experience in sell-side M&A processes and specializes in low-middle market businesses. Headed by Andrew Rogerson, an author, and multi-certified professional, RBS has had over 70 successful business sales.
Running sell-side due diligence ensures that the seller will see the same numbers the buyer does and allows a smooth M&A experience by preparing the seller and their team for any questions or issues that potential buyers may discover.
When the ink is dried on the engagement letter with the seller, the investment bank juniors will start putting together materials for a kickoff call with the company. They will put together immediate questions for the company, map out key work streams to lay out the process and put together a working group list (WGL) that has all the key contacts of the main participants (the investment banking deal team, the law firm contacts, the company contacts).
If potential buyers are interested in gathering more information, they will sign a Confidentiality Agreement (CA) or Non-Disclosure Agreement (NDA) where the potential buyer agrees to keep data received and the sale process confidential.
For many organizations that are new to the acquisition process, managing all aspects of the M&A process proves too big, too specialized and too complex to handle internally. Without dedicated and experienced personnel, the acquisition process can be problematic from beginning to end, starting with the evaluation and lingering long after the deal is done.
There are many reasons why companies would partake in a merger or acquisition, which include increasing market share, reducing competition, gaining instant traction in a new market or perhaps acquiring existing intellectual property (IP), but the endgame is always to grow value. So, in short, M&A is a process, in basic terms, that results when two companies combine with one another.
An M&A analyst is a member of the M&A team responsible for researching the market, analyzing trends, and presenting findings when it comes to the process of the M&A. The expertise of an M&A analyst lies in being able to identify notable details while researching the transaction, and good analysts are able to clearly and concisely present these findings to the stakeholders and decision makers of the deal. These findings also aid in the action plans for due diligence and other approaches taken during the course of the deal. The ability to analyze all parts of a business deal and effectively communicate those details to others is the main gist of the position. The roles and objectives of an M&A analyst include the following:
As the name suggests, a buy-side M&A analyst works for the buyer in the deal. The duties of a buy-side M&A analyst include developing a list of potential target companies, instigating contact with those companies, and ultimately pitching an offer. In addition, there is always lots of due diligence to handle, closing the deal details to attend to, and finally, helping to manage the post-merger integration of the company that was bought or acquired.
As opposed to a buy-side M&A analyst who works for the buyer, the sell-side M&A analyst is employed by the seller, or the target company, the company that will be merged or purchased by the acquiring company. In addition to the due diligence duties that are mandatory for M&A analysts on both sides of the deal, a sell-side M&A analyst assesses the offer and the competition, and similar to its buy-side counterpart, has to have the ability to clearly and concisely communicate this information to others working on the transaction.
However, I would argue that broad buy-side M&A deals are good to speak about in private equity interviews and corporate development interviews because they are close to the actual job in PE and CD.
This is a profound introduction for people who hope to work in M&A. Even I have worked for 3 years in the IB, I still cannot make so clear and well-organized explanations about the differences between buy-side and sell-side or between targeted and broad deals. I really enjoy reading and watching all the materials on your website.
A transaction always involves two parties: a buyer and a seller. Finance professionals commonly describe their positions as being on the buy and sell side of M&A. As with many finance languages, what this means depends on the situation. In the financial industry, these are referred to as the buy-side and sell-side, respectively. As an acquisition and mergers investment manager, you do 2 factors: one presents your bank to potential clients and earns business from them through buy or sell-side Mergers and acquisition, and the other executes the agreements offered by