If a company decides that it wants to sell its business, it must conduct due diligence on potential www.dataroomtech.info/ma-document-categories-and-examples/ buyers. This can be a long process that involves examining financial statements, talking to employees and visiting facilities. In this process it is essential that the company does everything possible to maximize the value of the sale. The M&A checklist can be a helpful tool for companies who are seeking to make a deal.

Term Sheet

A term sheet, also known as a letter of intent or memorandum of understanding, is the first step in an M&A transaction. It lays out the commercial terms for the deal. These are legally binding documents, and if there isn’t clarity in writing or the execution of it, the deal could result in problems down the road.

Purchase Agreement and Letter of Intent

The next stage in the M&A process is getting the final purchase agreement in place. This is a legal contract that lays out the terms of the deal, and is signed by both parties to signify their commitment to the M&A process. The M&A process is followed by due diligence, which entails reviewing financial records in an environment that is secure.

HSR filings

Under the Hart-Scott-Rodino Antitrust Improvements Act, M&A transactions that meet certain criteria must make an initial premerger announcement with the Federal Trade Commission and Department of Justice prior to closing the transaction. This is to ensure that the merger won’t have a negative impact on competition.