M&A 5: Managing An M&A Deal

When planning an M&A deal, managing the deal matters. Deals that run out of momentum often collapse.

There are a number of stages in an M&A deal for all sides including the following:

Preparing objectives, reasons, information, advisors and the business itself.
Identify candidates.
Initial due diligence by the buyer
Auction, woo and negotiate.
The seller will check the buyer has finance in place.
Preliminary agreement or term sheet setting out the main terms briefly subject to due diligence and the main agreement.
Detailed due diligence reviews by the potential buyer’s lawyers and accountants, etc
Check out government and tax approvals needed
Check out board and shareholder approvals needed
Obtaining any needed confirmations
Final detailed agreement prepared and executed
Post agreement implementation and integration by the buyer of whatever was acquired into the buyer’s existing operations.
Etc.

All this may entail many weeks of intensive activity. Practical aspects of managing the process of an M&A deal may include the following.

Assembling a good team on your side.
Assembling and analyzing due diligence data, usually in a Virtual Data Room (VDR) with appropriate passwords for different levels of seniority.
Each side should nominate a point person to receive requests and coordinate their side efficiently with one voice.
Preparing and updating timetables
Maintaining confidentiality until the parties are ready to make an announcement
Maintaining contact lists of management, advisors and others
Noting their locations having regard to geographical time differences
Noting upcoming public holidays
Noting legal and governmental limitations as well as the wishes of the parties.
Ascertaining country issues and cultural differences. Some people are polite and laid back, some aren’t, some have strong beliefs, etc.
Being ready to plug show stoppers should they arise – reassure, reduce price, add something, etc.
When and how to communicate (“sell”) the deal to customers, shareholders, management, employees, government, press.
Etc.

Next Steps:

Start planning the ingredients of your proposed acquisition or sale based on the above.
In particular, who is calling the shots on each side and how are they managing the process?
Pay attention to deadlines.
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.