M&A Process Flow: What Sell-Side vs Buy-Side Bankers Actually Do?

Aspiring to get into investment banking but don’t know much about the deal process?

Then this article is for you as we’ll do a deep dive into what the merger and acquisition process involves as well as the tasks you could be expected to handle on the sell-side or the buy-side of the deal.

Students should especially focus on these basics as you will not only be quizzed during interviews about how mergers & acquisitions deals are executed but also this knowledge will come in handy to help you align your expectations and skill set with the most-suited role for you.  

On a sell-side deal, the bank will market a firm to potential buyers & then help both sides to negotiate the deal and complete the sale process. 

There are 4 main steps that sell-side banks manage:

1️⃣ Meet with the firm & put together informational documents such as an offering memorandum, which will help market the firm for sale to potential buyers 

2️⃣ Create a list of potential buyers & send out an executive summary to measure interest in the deal

3️⃣  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

4️⃣ Work with the firm to maximize the purchase price, select the winning bidder & help to negotiate the terms, finalize documentation & then announce the deal.

Buy-side M&A: In a buyside 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 4 main steps:

1️⃣ The first will be to do a lot of research on a large number of potential acquisition targets based on what the client has represented that they are looking for.

2️⃣ 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.

3️⃣ 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.

4️⃣ Finally, you collaborate with the client to select the final target and work to negotiate and structure the deal and announce the transaction.

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