Overview of M&A
Employees are typically curious for information about the steps of a merger. This article explains the merger & acquisition process in a simple, concise manner.
Describe Due Diligence
- During Due Diligence, information is collected:
- To assist in the valuation of an acquisition target
- To uncover any risks that may exist (e.g., existing or potential legal liabilities)
- To uncover opportunities for additional growth or profitability that have not been capitalized on by the organization being evaluated for purchase
- Due Diligence can be divided into:
- Public Due Diligence—collection of information that already exists in the public domain
- Inside Due Diligence—collection and analysis after contact has occurred between the companies
- Both organizations begin formulating an Agreement as Due Diligence information is collected.
- This step includes the different levels of Agreement that may be signed as the deal progresses, such as:
- Letter of Intent
- Definitive Purchase Agreement
Describe Integration Planning/Integration
- During this step, detailed Integration Plans are developed. These plans identify the priority items to be addressed operationally after the deal is closed.
- Typically, teams of people (e.g., Task Forces) organized around key functions or processes develop these Integration Plans, then present recommendations to a Steering Committee for approval.
- These plans include detail on such things as ...