When an M&A transaction takes place, the seller’s company is tasked with maximizing the terms and price of the deal. Many important figures participate in this process, such as shareholders, boards of directors, legal and financial advisors, and others. In general, they constitute a transaction team. To successfully close a transaction, find here the best overviews of virtual data rooms in this article.
What is an M&A team?
As you know, mergers and acquisitions are a multi-step and complex process. An M&A team comprises several professionals from different fields who deal with different phases of this transaction. The deal team requires that everyone on both sides of the deal do their part. This is key to the success of an M&A deal, which distinguishes it from private equity and venture capital deals.
To collaborate effectively, the team must have a common space to work on information, communicate and share documents. Virtual data rooms are ideal for this task. They are incredibly easy and flexible, with centralized space, communication tools, and advanced security features. Here, you can find the best overviews of virtual data rooms and the provider that’s right for you.
The responsibilities of the deal team include:
- Developing a long-term business strategy and securing the best price to buy or sell
- Searching for new M&A and investment opportunities
- Defining the objectives of each transaction
- Planning and executing the transaction process
- Partnering with other team members and interacting with the executive team
- Identifying and resolving potential issues during and after due diligence
- Assessing the success of acquisitions and investments
What your transactional team needs to know during the transaction
Below we provide a list of questions that the management team should consider during a merger and acquisition as a selling company:
- Business continuation and strategic plan questions
You must understand the strategic intentions and plans that the buyer’s side is offering you. It would help if you learned about the buyer’s plans, how they plan to develop the business further, how the integration will take place, what synergies will be possible due to the acquisition of the company, and further points related to this issue.
- M&A issues
It’s critical for members of the management team, especially the senior management team, to learn about the dynamics of the deal and the key issues surrounding the acquisition. For example, what the contract structure is planned, the price range, exactly how the acquisition price will be determined, what key due diligence steps you need to take, and more.
- Fair incentive mechanisms
Management teams should have equity incentive mechanisms, and every wise private or strategic buyer knows this. To that end, deal teams need to know what kind of incentives they would like, what percentages of incentives will be allocated to individual team members, how stock transfers will work, whether shares can be sold when the option is exercised, and if so, at what price. Of course, this question can include many other details; the important thing is that you know what direction to think.
- Employment contract questions
The buying company may enter into an employment agreement with the CEO of the selling company. As the CEO of the selling company, you need to request a form of employment agreement in advance. You should contact a professional consultant to review and negotiate this form in detail.