Walk me through a sell-side M&A process

It usually starts once the bank wins the mandate. In preparation, the team builds the financial model and valuation, works with management on the key selling points, drafts a short anonymous teaser and a detailed confidential information memorandum, and builds a list of strategic and financial buyers. As an analyst, much of my time would go into the model, the CIM and the buyer list.

Then the bank goes to market. It sends the teaser to potential buyers, those interested sign a non-disclosure agreement and receive the CIM. After a few weeks, buyers submit non-binding indications of interest with a value range and key terms. The seller and bank use those to choose a shortlist for the second round.

In the second round, shortlisted buyers meet management, do detailed diligence in a virtual data room and comment on a draft purchase agreement. They then submit final, binding bids with a marked-up agreement and financing details. The seller negotiates with one or two leading bidders, signs the purchase agreement and announces the deal, and closing follows after regulatory and shareholder approvals. A broad auction maximizes competition, while a targeted process with a few buyers protects confidentiality.