The mergers and acquisitions process
Buying a company requires thorough preparation, so we use these ten steps to help you move through the company acquisition process: from the initial meeting to finalizing the deal.
- Getting to know each other
- Establishing the search profile
- Longlisting and shortlisting
- Approaching candidates
- Company analysis and valuation
- Drawing up and signing a letter of intent
- Information and further consultation
- Due diligence
- Submitting a financing application
- Closing
These are the minimum requirements for a successful company acquisition process. We continually evaluate whether the steps are being followed properly and whether additional checks are needed.
For a successful collaboration, it is important we get to know each other properly first. Starting a dialogue about your specific wishes and requirements allows us to determine our approach and method. For example, why do you want to buy a company? Which sector are you interested in? What is your plan once the company acquisition process is concluded? Do you know how the acquisition will be financed? These questions can help us to determine how to approach the mergers and acquisitions process. If both parties are positive about the introduction, we can get to work with the chosen approach. Before we start, we will put together a deal team of Marktlink consultants who will guide you through the entire process.
After getting to know you, we will have a general idea of what you want, but a more in-depth understanding is needed before we approach any candidates. A clear and specific search profile must be drawn up: this should include the size of the company, the location or region, your preferred sector, the financial situation, and the company’s market share.
We use the completed search profile to dive into the market to look for candidates, and we put the search request out to our national and international network. We don’t just look at companies we know are currently for sale, but at all companies that might be of interest to you. We add the possibilities to a longlist, which we condense into a shortlist in consultation with you. Only the most suitable candidates will remain when we start the acquisition process.
Now we know exactly what you are looking for we can approach suitable candidates from your shortlist. We gauge the selling interest and gather as much information from the companies as possible. If the talks go well, we will bring you and the potential seller together for an introduction.
We distinguish ourselves from other advisors by our active market approach to the mergers and acquisitions process. We don’t just contact companies that are open to selling, but also companies where the topic might not have come up yet. That means we can tap into a larger market with a better chance of finding a suitable business to buy.
After the exploratory talks, we analyse the company and the market, and request further information. We can then make an indicative value assessment and, together with you, arrive at a maximum purchase price. We use the company information supplied and other indicators – such as market development in the sector – for the valuation.
Your bid has been received in good order, and you and the seller are in agreement. It’s now time for the next phase in the acquisition process. The solicitors will draw up an agreement of intent, which is a provisional sales agreement that includes the purchase price, the payment method and terms, guarantee obligations, the competition clause, and cancellation clauses. These will be subject to negotiations to reach an outline agreement. In 95% of cases, signing the agreement of intent leads to a completed transaction.
After signing the agreement of intent, relevant groups and individuals must be notified. As well as talking to employees, you may need to consult with trade unions and statutory authorities. This communication must be handled properly to create support for the acquisition process.
Due diligence will comprise an assessment of the accuracy and completeness of the information on which the agreement of intent is based and may vary from a brief procedure to a comprehensive process of critical examination encompassing the entire company. This way, you know exactly where you stand when you take over the company, without any nasty surprises during the acquisition process or later on. We will discuss the due diligence results with you and the selling party and ensure everything is correctly finalized.
Most acquisition transactions require suitable financing to fund the acquisition and complete the deal, so we will work with you to assess your financial requirements and obtain quotations if necessary. We can draw on a network of more than 250 sources, such as banks, private equity funds, and informal investors. We can present your plans and negotiate to obtain best terms.
The final phase of the company acquisition process in the UK is to close the deal and finalise the acquisition. All legal work is carried out, and the outcomes of the due diligence are recorded. Once this has been done, the final purchase contract is drawn up, and an appointment is made at the notary’s office to complete the transfer. Then at last, the moment you have been working toward: the deal is done, the acquisition process is complete, and you are the proud new owner of the company. Congratulations!
