Sell-Side M&A deal vs Buy-Side M&A deal, what do bankers really do?
Many aspire to be bankers in large corporations without knowing much. M&A is a common practice in large corporations, so it is important to know a banker’s duties in a sell-side & buy-side M&A deal.
In a sell-side deal, the bank'll market a firm to potential buyers & then helps both sides negotiate the deal & complete the sale process. There Are 4 main steps that you need to know about. The bank will:
📌 meet with the firm & put together informational documents such as an offering memorandum, which will help market the firm for sale to potential buyers
📌 then create a list of potential buyers & send out an executive summary to measure interest in the deal
📌 set a deadline for prospective buyers to submit an indication of interest, which narrows down the group. The bank will select the prospective buyers who submit acceptable indications of interest & continue to send them additional information
📌 work with the firm to maximize the purchase price, select the winning bidder & help to negotiate the terms, finalize documentation & then announce the deal.
In a buy-side deal, the bank will go out and search for potential companies for the client to acquire and negotiate the deal to obtain the lowest price possible. There are four main steps.
The first will be to do a lot of research on a very large number of potential acquisition targets based on what the client has represented that they are looking for.
After sharing the initial list with the client, you will cut the list down based on their feedback and decide which targets to approach about being purchased. After having meetings with each of them, you decide which to pursue further based on how open they are to the idea of an acquisition.
The third step is to do further due diligence on each of the targets which are open to acquisition while further narrowing down the list and coming up with an offer price.
Finally, you work with the client to select the final target and work to negotiate and structure the deal and announce the transaction.
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