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.

How to Explain M&A Process to Employees

  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

Describe Negotiation/Agreement

  • 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 ...