If a business decides it wants to sell, it must conduct its due diligence with prospective buyers. It can be a lengthy process that includes reviewing financial statements, interviewing employees and visiting facilities. In this process, it’s crucial that the company does their best to extract the most value from the deal. The M&A checklist is a useful tool for companies seeking to make a deal.

Term Sheet

A term sheet, also known as a letter of intent or memorandum of understanding, is the earliest step in an M&A transaction. It defines the commercial terms for the deal. These are legally binding documents, and should there be a lack of clarity in the form or execution, this could lead to problems later on.

LOI and Purchase Agreement

The next step of the process of M&A is to create the definitive purchase contract. The contract lays down the conditions of the M&A deal and is signed by the two parties to commit to it. This is followed by the M&A due diligence process, which entails reviewing financial records and other sensitive information in a safe environment.

HSR filings

According to the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act), M&A transactions that satisfy certain criteria 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 a negative impact on competition.

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