If a company decides to sell its assets, they have to do their due diligence on the buyer they are considering. It can be a lengthy process that involves examining financial statements, talking to employees and touring facilities. In this process, it is important that the company does everything possible to maximize the value of the sale. The M&A checklist is an effective dataroomtech.info/ tool for companies who are looking to do a deal.
A term sheet, also referred to as an expression of intent or memorandum of understanding, is the first step in an M&A transaction and sets out the commercial terms for the deal. These are legally binding documents, and when they’re not written or executed in a clear way, it could lead to problems in the future.
Purchase Agreement and Letter of Intent
The next stage in the M&A process is obtaining the final purchase agreement in place. It is a contract that specifies the conditions of the M&A deal and is signed by the two parties to sign it. Then comes the M&A due diligence process, which entails looking over financial records and other sensitive data in a secured environment.
Under the Hart-Scott-Rodino Antitrust Improvements Act, M&A transactions that meet certain requirements must file an initial premerger notification with the Federal Trade Commission and Department of Justice prior to closing the deal. This is to ensure the merger doesn’t have a negative impact on competition.