Merger and acquisition deals - a checklist
A checklist of procedures for mergers and acquisitions and the importance of getting professional advice.
After you have registered interest in doing a deal with another business you will probably follow a process that includes the following steps:
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appointing professional advisers - legal and financial
- carrying out due diligence
- valuing the business
- negotiating financing of the acquisition/merger
- making an initial offer subject to contract
- agreeing the main terms of the deal including a payment schedule, warranties and indemnities from the other business
- updating due diligence based on access to the target business
- finalising the terms of the deal - including restructuring of the shareholding, if appropriate
- announcing the deal and communicating it to staff
In the case of a merger, you will need to integrate key aspects of the two businesses, specifically:
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management
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staff
- technology
- communications
- processes, policies and procedures
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payroll
- training
- personnel policies
- invoicing and purchasing systems
The role of professionals
It is important for you to seek professional advice when considering a deal. You may use bankers, accountants, lawyers, surveyors and valuers for different matters. Advisers with experience in deals will help you make the right choice, pay a reasonable price and avoid pitfalls during and after a deal.
Advisers can provide valuable guidance in areas such as valuing the business, financing the deal, terms and contracts, reviewing legal aspects and specialist valuation of specific areas of the business.
Make sure you agree clear terms of reference and how the work of different advisers will be co-ordinated. Advisers may charge fees on an hourly, fixed or contingent - no deal, no fee - basis.
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