If a business decides it wants to sell its business, it must do its due diligence with prospective buyers. The process can be lengthy and involves looking over financial statements, talking to employees and touring facilities. In the process, it’s important for the company to do its best to get the most value out of the sale. The M&A checklist for documents is a useful instrument for companies looking to make an acquisition.
Term Sheet
A term sheet can also be known www.dataroomtech.info/4-best-investment-banking-books-from-industry-experts/ as a memorandum or intent, and it defines the commercial terms of the agreement. These are legally binding documents and if there isn’t clarity in the form or execution, it could cause problems down the road.
LOI and Purchase Agreement
The next stage in the M&A process is getting the definitive purchase agreement in place. This is a legal contract that lays out the conditions of the transaction, and is signed by both parties in order to commit to the M&A process. This is followed by the M&A due diligence process, which includes reviewing financial records and other sensitive data in a secured environment.
HSR filings
In accordance with the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act), M&A transactions that meet certain requirements need to notify the Federal Trade Commission and Department of Justice of the initial premerger notices prior to closing the transaction. This is to ensure that the merger will not have an adverse impact on competition in any of the relevant markets.