Mergers and Acquisitions Process

Below is a free-to-watch video module on mergers and acquisitions process.  Learning the mergers and acquisitions process will help you better understand the role that M&A plays in global finance and how these often complex deals are negotiated and finalized.

This video was taken from our Certified Investment Banking Associate (CIBA) program which is the investment banking certification and training program hosted on our platform.

Video Transcript Summary of the Mergers and Acquisitions Process:
  1. Why do companies go through the mergers and acquisitions process?  
  2. A company may want to augment its existing business.
  3. Or it could seek to expand the geographic reach of its business.
  4. A company may want to enter a new sales channel.
  5. A buyer may recognize that it will gain significant operating synergies.  
  6. Some firms buy businesses to prevent their competitors from doing so.
  7. Investment bankers may have brought a potential deal to management’s attention.
  8. Financial buyers may see an opportunity for excellent investment returns.
  9. The buyer may gain access to a new top-notch management team.
  10. The financial buyer, such as a private equity firm, may have experience turning around struggling businesses.
  11. The process is a two round process: the first one is when the investment bankers will put together a list of potential buyers and then send out executive summaries and teasers to those potential buyers.  
  12. Next, an offering memorandum is put together that will include relevant information, legal info, and an overview of the financials for the firm.
  13. Then, the bankers will include a non-binding letter of intent that will lead these potential buyers to round two.
  14. In round two, the investment bankers will work together with management to put together a presentation.  
  15. In the management presentation, potential buyers will see the management team in action presenting the business to bidders.
  16. Then, a data room visit is arranged where junior bankers provide bidders with access to more detailed information than what is included in offering memorandum.
  17. Investment bankers (and lawyers) then put together a draft purchase agreement which is distributed to the potential buyers along with bidding instructions.  
  18. The bankers then receive final bids (typically in the form of marked-up purchase agreements) and work with these clients and their lawyers to put together a definitive deal.  
I hope that this video has provided you with a step-by-step guide to the mergers and acquisitions process.  

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