Corporate Development: Buy-Side Representation

If you want to grow your business by acquiring other businesses, we can be your corporate development department. In addition to having an M&A advisor that is looking out for your interests, we can manage the process for you. Listed below are the typical steps in the process.

Develop a Strategic Plan

Before beginning the process of purchasing a company, a business should fully understand the purpose behind the acquisition. The business should base this purpose on its existing corporate objectives. A business should decide which purpose best fits its business strategy. That will create a list of attributes the business seeks in the target.

Develop a List of Potential Targets

With the companys strategic objectives in mind, we will develop a list of potential targets. Chances are, a business will already have identified some potential target companies.

Approach the Target Companies

Reaching the appropriate party, usually the owner, at a company takes careful research and planning.  Acquiring companies should take time to craft a plan for approaching the key players. If a business has an M&A advisor in place before the approach, it can give that business the edge in making the purchase since it shows seriousness on the part of the buyer.  In some cases, a company courts a potential acquisition target for months before moving forward with an acquisition. Businesses should be patient during this part of the process, since it can take a prolonged period of time for a company to become comfortable with the concept of an acquisition.

Determine if the Target Meets the Strategic Objectives

While the target business is determining if an acquisition is in its best interest, the acquiring company should set aside time to make similar determinations.  An acquirer needs to do enough due diligence to determine that the company wishes to acquire the target. Moving forward with a letter of intent, due diligence, and everything that an acquisition entails is a significant investment in time and money. Therefore. it is important to ensure the target company meets the acquiring companys strategic objectives before making an offer.

Draft and Negotiate a Letter of Intent

A Letter of Intent (LOI) presents the basics of the deal to the target. It shows the target company you are serious about making the purchase. The terms of the agreement should include any non-disclosure agreements that will be required as part of the deal. The deal must be structured in a way that is agreeable to both parties.  We will assist you and your attorney in drafting a Letter of Intent.

Perform Due Diligence

Due diligence entails a significant amount of effort by the buyer and seller. Often a virtual deal room is used to serve as a central repository during the data collection process. Attorneys, accountants, and others involved in the due diligence for both sides have the ability to access this repository to facilitate the sharing of information during this phase of the process.

Structure and Close the Deal

Once due diligence has been completed, the final deal documents can be completed. The buy-side representation works directly with the seller’s attorneys to ensure both parties are happy with the final deal.

Post-Closing Integration

After closing, the business takes over, working to integrate the newly-purchased business into its existing one. Buy-side representation is no longer needed from this point forward, as the business begins its future as a new, larger company.