With careful planning and an understanding of the buy side transaction process, acquirers can find and win quality targets.
Determine M&A Strategy
- Management objectives
- Market analysis
- Competitive analysis
- Investment hypothesis
- Alignment with business model
Timing: 1-4 weeks
Identify Targets
- Research & develop criteria
- Size
- Industry
- Geography
- Provide preliminary target list
- Solicit interest from selected targets
Timing: 2-4 weeks
Vet Interested Targets
- Financial performance-past & forecasted
- Customer attractiveness/concentrations
- Vendor concentrations
- Systems & processes
- Capital expenditures
- Explore synergies
- Determine targets to move forward
Timing: 4-8 weeks
Pre-LOI Due Diligence
- Determine deal structure and price
- Identify financing sources
- Negotiate key terms
- Hold management meetings
- Tour facilities
- Perform detailed valuation analysis
- Investigate integration costs
- Execute LOI
Timing: 3-4 weeks
Post-LOI Due Diligence
- Evaluate quality of earnings
- Review operations
- Review human resources
- Assess environmental issues
- Draft transaction documents
- Plan integration
Timing: 6-12 weeks
Close
- Execute agreements
- Wire proceeds
- Announce to employees
- Begin integration process