Merger and acquisition (M&A) transactions need thorough preparation, professional guidance, and a dedicated management team. Preparing for a merger and acquisition is time-consuming, but companies have ways to accelerate the process. Consider creating an executive summary, establishing a deal room, and preparing a disclosure schedule. Here are six tips to help you optimize merger and acquisition deal processing:
1. Prepare a Company Executive Summary
In an M&A transaction, the seller creates an executive summary or overview document. This document presents the business to potential buyers. An executive summary is a slide presentation covering a variety of topics, such as the team, technology, financials, goods, and services. It also covers the purpose, vision, issue, solution, market opportunity, clients, rivals, traction, business model, and marketing. An executive summary slide deck summarizes the business for potential buyers.
2. Anticipate and Prepare for Due Diligence
M&A deals involve extensive due diligence processes. Buyers want to know about the company’s potential risks. Such risks include litigations, problematic contracts, intellectual property issues, and contingent liabilities. They will investigate financial statements, cybersecurity issues, data breaches, regulatory risks, and more. Preparing for due diligence helps the seller respond to the buyer’s queries.
3. Set up an M&A Online Deal Room
One of the most efficient ways to accelerate the merger and acquisition due diligence process is through an online deal room. Online data rooms give involved parties instant access to company and merger documents. Sellers add corporate documents, financial statements, contracts, and other confidential details. They also set permission restrictions to prevent unauthorized access. Specific files are accessible only to individuals who have been pre-approved. Online data rooms also provide insights into documents buyers have an interest in. Sellers can see who viewed what documents and when they viewed them.
4. Identify and Prepare M&A Documents
Sellers can establish the data room and populate it with the necessary merger and acquisition documents the buyer needs. M&A counsel helps the seller develop a checklist of the documents and information potential buyers expect. Counsel also helps screen sensitive privileged documents and determine their access.
5. Prepare a Complete Draft Disclosure Schedule
A disclosure schedule acts as a gating device for your M&A deals and foresees potential problems. Sellers prepare a disclosure schedule early in the process to help disclose key contracts, litigations, and more. The schedule needs to be correct and complete to prevent a breach of the acquisition agreement. Incomplete schedules deter buyers or expose sellers to post-deal liabilities. The disclosure schedule is a complex document, and rafting it early may help prevent delays.
6. Work With a Competent M&A Lawyer
Corporate lawyers help with merger and acquisition transactions, but hiring an expert dedicated to such deals is the best solution. Merger and acquisition contracts are complex, multifaceted, and require experienced attorneys to prevent contentions. A reputable merger and acquisition lawyer brings the experience and skills needed in such situations. Competent M&A management teams and counsels also help to negotiate the best deal. The counsel involves experts from various fields. These fields include:
- Compensation and benefits
- Intellectual property
- Employee matters
Use a Deal Room for Optimized M&A Processing
Closing merger and acquisition deals requires a clear understanding of the process. Sellers need lawyers, investment bankers, signed NDAs, optimized disclosure schedules, and reliable data rooms. Buyers also conduct thorough due diligence to understand the company they are buying. Due diligence also helps them understand what new obligations await them.
Using a deal room may help accelerate the process by providing access to key documents when needed. Data rooms provide a secure platform where businesses can exchange and monitor certain documents.