When planning an M&A deal, advance preparation matters.  

How should buyers prepare for an M&A deal? How should sellers prepare for an M&A deal – typically referred to as an exit for them?

There are a number of stages for all sides including the following.

• Preparing objectives, reasons, information, advisors and the business itself.
• Identify candidates.
• Auction, woo and negotiate.
• The potential buyer will need to conduct due diligence on the seller.
• In many instances, both sides may conduct due diligence on each other e.g. if the deal is a joint venture or if the consideration would be paid with shares/stock of the purchasing group.
• The seller will check the buyer has finance in place.
• Execute the deal.
• Post deal integration.

Preliminary questions for each side before getting going typically include

• Is intellectual property (IP) protected?
• Is the business in good shape?
• Is profitability adequate and/or or can be reasonably enhanced?
• How is the cash flow?
• Are personnel performing well?
• Are management performing well?
• What will the main negotiation issues be – price and what else?
• Are founders prepared to stay on to help ensure a smooth handover?
• What would the post acquisition business model be?

Have your business plan ready.

As Paul Simon sang, “Get a New Plan, Stan!” (50 Ways to Leave Your Lover).

Both sides need a business plan. Set goals. Have a strategy and time-table for achieving the goals. Share relevant parts with employees.

For this, management needs to demonstrate leadership. Leadership means a longer term vision and entrepreneurial skills to make it all happen roughly to plan. Assess the market and strategy for reaching the market. Identify unique selling points, points of competitive advantage, e.g. niche product, trend or clientele. Is technology or knowhow dependable, protected and evolving with the times?

The seller should list competitors and how they compare.  The seller should have vision, past financial statements ready and a budget going 3 – 5 years into the future, reflecting its milestones.

Predicting the future is difficult, but necessary to help identify relevant factors. What matters in particular are the assumptions made – they need to be listed and make sense.

Next Steps:

• Start planning the ingredients of your proposed acquisition or sale based on the above.
• Many of the surprises may be predictable with proper preparation.
• What is the other side really after? Can you read between the lines?
• Consult legal and professional advisors in each country concerned in specific cases.
• Contact us if you are looking for an M&A candidate to buy or sell.
• Contact us if you have your candidate and want to prepare for an M&A deal.

© Leon Harris 19.5.25, all rights reserved.  Email: [email protected],  Cell: +972-54-6449398,