Doing the deal
The negotiating team must carry sufficient “clout” and must have a clear, strong mandate from the business owners as a whole, to be able to deal with much of the negotiation process, without having to constantly refer matters back.
All parties must be aware of the heavy time commitment to this part of the deal. Having us on board to guide the process, means that the number and time of senior people kept away from the operating business can be managed effectively.
Once the IM has been issued, it would be normal for those who continue to have an interest to meet with the target and to elicit whatever further information they may need. This should allow the acquirer to issue indicative terms within an agreed timescale and the target to have carried out some informal due diligence on the acquirer.
There will then be a short period of time to move the indicative offer to non-binding Heads of Agreement.
Due diligence and detailed negotiation will then begin, for both sides. This will peel away the surface of the initial information exchanges and focus on verifying the details of each business’s structure, business arrangements, client relationships and, most importantly, finances. We can guide you through this process and advise accordingly.
Potential “deal-breakers” will be flushed out and will need to be addressed as a priority. Here, it is best to allow us to tackle the difficult issues with the other side, bearing in mind that the “other side” are likely to be your future business partners!
The structure of the deal will be drawn up in detail, based on the valuation and the price that the partners have agreed is required, the final deal being subject to both parties being satisfied with the due diligence outcomes. The structure will often be driven by tax considerations viewed from both sides of the transaction.
As the negotiations reach the critical point, we can advise on ameliorating factors such as prospective tax savings and potential synergies of the NewCo versus the two separate businesses.
Once the detailed terms have been agreed and any differences ironed out, the deal can be struck and detailed business and partnership agreements signed.