Mergers & Acquisitions For Dummies, 2nd Edition

Chapter 3

Utilizing the M&A Process

IN THIS CHAPTER

Learning the typical steps in an M&A deal

Understanding the importance of using the process to strengthen your position

Although the truism “always be prepared” applies to just about every aspect of life, it’s especially true in mergers and acquisitions. To the uninitiated, the world of M&A may seem to be a Wild West of sorts: chaotic, bizarre, and full of strange nomenclature and acronyms. But believe it or not, the buying and selling of companies has a clearly defined process. To be successful, a buyer or seller needs to understand how that process works; both sides have to have the capacity to think many steps ahead and plan accordingly — just like in a chess game but without the checkered board.

In this chapter, I break down the phases involved in a typical M&A deal as well as define the two methods of selling a business: auction and negotiation. I also look at the constantly changing power balance between a buyer and seller in a deal and provide suggestions for preserving as much power as possible in less-than-ideal circumstances.

Trusting The Process

Whenever I discuss the M&A process, I always show these four simple words:

Prepare | Control | Frame | Define

When you’re prepared, you know what comes next instead of being ...