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Maximize Your Next M&A Deal –Merrill Datasite

Pattinson Hoover

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Does your management team have M&A experience? What preparation work must be completed and what resources will be required? For many mid-sized companies, preparing for an M&A transaction places a significant burden on staff and resources. The management team, largely focused on the day-to-day operations of the company, must now find time to lead the company through the preparation process and be available to respond to arising issues and unexpected challenges as a potential deal unfolds.

The best practice is to conduct a “readiness” assessment to determine the steps necessary to bring your company to market and then complete those items. Some of the key issues include:

  • Assessing the right time to go to market, given the company’s sales and profitability trends, combined with market developments
  • Preparation and validation of financial records
  • Preparation of customer and market analysis
  • 3- to 5-year strategic plan and financial forecast
  • Review and resolution of legal, operational, managerial and environmental issues
  • Development and summary of marketing and sales plans, including new business pipeline

Sellers should objectively analyze their capabilities and their resources in light of the following areas of risk:

  • Positioning the company correctly - There is a tendency for sellers who are presenting their own company to package it according to their own perspective, rather than through the eyes of the buyer. This may result in focusing on the seller’s, rather than on the buyer’s interests. Objectivity is lost, and so is the opportunity to maximize value from the interested buyers.
  • Identifying the right buyers – Sellers have a tendency to hone in on a certain potential buyer or group of buyers and miss good opportunities by overlooking other buyers who can potentially deliver a better deal. An objective third party, such as an investment banker, will have knowledge of, and access to, a broader range of buyers. Equally important, they will also better understand how to customize the approach to each party to ensure the maximum chance of success.
  • Designing and sustaining a competitive process - M&A deals are highly specialized transactions, characterized by distinctive nomenclature and negotiating behaviors. Recognizing negotiating ploys that can lower a valuation can be challenging for sellers who are new to the process and often lead to unsuccessful transactions when a deal unexpectedly turns in the wrong direction. M&A experts have the necessary experience to read the situation and keep the deal on track. Keeping multiple interested parties involved to create and leverage the inherent competitiveness between the parties is an important tool.

With the aim of driving the best valuation and managing the certainty of closing, sellers need to ask themselves if they can get the deal done quickly and achieve maximum results. They need to have the experience to deal with all the intangibles that go into a successful deal. In today’s risk-adverse market, the chances of a deal being withdrawn or renegotiated over and over are higher than ever. Failure to account for the factors mentioned above can have seriously damaging consequences to a deal. To drive the best results, including the highest valuation, draw on the professional expertise of mid-market deal experts.

If you are considering a capital fundraising activity for your company but have little experience with the M&A market, don’t go it alone. Ensure that you are best positioned for success by starting the process early, working with professionals who have experience selling companies of your size, in your market space, and leveraging technology to bring your M&A deal to market as quickly and efficiently as possible.

A trusted partner

Merrill DataSite ( ) Virtual Data Room (VDR) is an online deal room that optimizes the due diligence process by transforming the traditional paper data room into a secure online data room, accessible via the Internet. Merrill DataSite offers a secure and highly efficient method of sharing critical business information for electronic due diligence in M&A advisory, banking M&A, mid market M&A review, transfer of small business ownership when selling a company, document warehousing, mergers and acquisitions due diligence, succession in family business or when buying a business, IPO and secondary offerings, asset purchases, venture capital due diligence, bio tech licensing, commercial and corporate real estate ventures, bankruptcies, financial restructure, liquidation analysis for bankruptcy, corporate debt restructuring, preparing for exit strategies, and many other transactions that require extensive document sharing.


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