What Does Mergers and Acquisitions (M&A) Mean?
Mergers and acquisitions is more commonly referred to by it's acronym, M&A, by buyers and investment bankers. It refers very loosely to the process of buying and selling a company. The difference between mergers and acquisitions is simply how a deal is presented to manage the public's perception of the transaction.
A merger is usually presented as "softer" since its connotation is of "collaboration" and "partnership" as opposed to an acquisition which can be perceived as the seller losing all control post-transaction. Regardless of how a transaction is presented, there is always a party that lands in control after the deal is done.
Divestopedia Explains Mergers and Acquisitions (M&A)
The M&A process, in the context of a private company sale, usually entails the following steps performed by an investment banker/business broker:
- Preparation of a teaser to assess the initial interest in the company from prospective buyers;
- Completion of a non-disclosure agreement (NDA) by interested buyers who wish to review further;
- Preparation and delivery of the confidential information memorandum (CIM);
- Management of expressions of interest (EOI) and/or letters of intent (LOI);
- Qualification of prospective buyers for an adequate fit for the buyer;
- Qualification of offers to ensure the maximum value and cleanest structure are achieved;
- Management of the due diligence process to ensure all requirements by the buyer are met, but also conducting due diligence on the buyer; and
- Closing of the transaction and post-transaction support.