The M&A process, partial or total, differs from other operations because majority of the time the key to success lies in the total synergy of the operation.

1.Target definition

Once the sales strategy and the project have been defined and the key people and shareholders have been involved in order to start the M&A process, the first step is to define the targeting, i.e. the target companies selected through criteria regarding sector, size, business model and market position.

2.Data collection and identification of potential buyers

Once the target has been identified, create a list of potential buyers to present the opportunity. We will then proceed to collect and prepare information for data room, Infomemo and preform potential Due Diligence if need be.

3.Anonymous Teaser

At this point of the M&A process, an anonymous teaser will be prepared, which will the allow the necessary time to provide the information to completely evaluate the potential interest.

4.Confidentiality agreement

If the intention is to proceed, a confidentiality agreement will be shared and signed, to start the activities of sharing the Data Room and the financial and project documentation. For transactions of this type, a conclusive document on the potential of the transaction for the benefit of the buyer, and synergy, is often successful.

5.Non-Binding Offer and Letter of Intent

In case the initial investigations of the M&A process turn out to be positive, the acquiring company will share a Non Binding Offer that establishes the terms of agreement between seller and buyer. This offer will include the subject of negotiation, valuation, purchase price, payment terms, right to exclusivity, confidentiality, governance agreement and retention of key people for the transition.

At the same time, a Letter of Intent (L.O.I.), confirming the content of the non-binding offer and committing the parties to conclude the transaction in the case that Due Diligence is positive.

6.Due Diligence

At this point we proceed with the Due Diligence: financial, market, product or service, operational, accounting, fiscal, legal, labor and in some cases, environmental analysis. Negotiation, thus defining the value of the transaction and the payment terms.

7.Signing the agreement

This is the process of defining the structure of the transaction, setting the price, timing and ancillary clauses (e.g. earn-out) and payment terms. Non-competition agreements, suspensive and resolutive clauses, ancillary contracts, governance structure, and definition of the new Board of Directors.

8.Financial & Closing

If you need clarification or would like to receive more information, do not hesitate to contact us!

The BizPlace Team