Chapter Eleven
Mergers and Acquisitions from the Sell Side
In this chapter, we cover issues that are more relevant to the sell side of an M&A transaction, as well as issues that are equally relevant to both sides. In Chapter 12, we cover issues that are more relevant to the buy side.
An investment bank is usually retained as a sell-side adviser only after the client has made a decision to sell, or at least is seriously considering doing so. The deal timeline can be short and intense or excruciatingly long (and intense), but the basic necessary elements for the sell-side adviser always include setting up the process, marketing the transaction, managing the bidding/negotiation process, and executing the transaction. It is important for exam purposes to understand the correct order of events in the sale process. It would be a good idea to thoroughly review the following table, and then review it again before beginning Chapter 12.
|
M&A Sale Process Timeline—Buy-Side and Sell-Side Tasks |
|
|
Sell Side |
Buy Side |
|
Preliminary |
Preliminary |
|
Negotiates and finalizes engagement letter |
Negotiates and finalizes engagement letter |
|
Preparatory Tasks |
Preparatory Tasks |
|
Analyzes potential transaction structures, tax issues, regulatory issues, and corporate issues; evaluates existing obligations |
Analyzes buyer’s strategy and resources, rationale for acquisition, identifies potential hurdles and tax issues (no specific target) |
|
Conducts valuation analysis |
|
|
Analyzes, identifies, and evaluates potential buyer types and | |