If a company decides it is going to sell, it must conduct its due diligence on potential buyers. This process is often lengthy and includes reading financial statements, speaking to employees, and examining facilities. In the process, it’s important for the company to do its best to get the most value out of the deal. The M&A document checklist can be a valuable tool www.dataroomtech.info/ma-document-categories-and-examples/ for companies looking to make an acquisition.
Term Sheet
A term sheet can also be called a memorandum, or intention and outlines the commercial terms of the deal. These are legally binding documents, and If there isn’t enough clarity in the form or execution, they could cause issues later on.
LOI and Purchase Agreement
The next step of the process of M&A is to create the definitive purchase contract. This is a legal contract which outlines the details of the deal and is signed by both parties in order to commit to the M&A process. Then comes the M&A due diligence process that involves scrutinizing financial records as well as other sensitive information in a safe environment.
HSR filings
According to the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act), M&A transactions that meet certain requirements must 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 the relevant markets.