Anatomy of an M&A Transaction

When selling an online or digitally native business, process dictates the outcome of a high-value M&A transaction. From valuation to closing and everything in between, each stage must be handled professionally to secure the maximum value at a potential sale. An Investment Banking professional can devise an appropriate strategy that will ensure each of your goals is met.

photo of a skyscraper where business deals and M&A transactions might be conducted.

Stages of an M&A Transaction

An experienced Investment Banking professional’s refined approach to understanding your company and taking it to market will invariably result in a much smoother, hassle-free experience. Here are just a few of the ways an Investment Banker creates value at each stage of the business sale process, securing the best possible outcome for you.

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Your advisor will begin by conducting an extensive operational and financial analysis to derive an appropriate valuation range and marketing strategy for your transaction. This data-rich process yields a deeper, more accurate business valuation than those derived by online calculators or brokers that merely apply a simple, cookie-cutter multiples.

Research

Next, one of the Partners of our firm collects and reviews all pertinent corporate documents to develop a nuanced understanding of the business. This, combined with in-depth industry research and the data gathered during the valuation stage, will help produce incredibly professional marketing documents and allow us to better represent you as we can speak about your company as though we owned it.

Vetting information up front also reduces time spent during later stages of the deal and provides the accuracy and confidence needed to get the transaction through the critical due diligence phase. Consequently, your advisor will be able to leverage their extensive network of capital markets, institutional investors, and banking connections to determine the best buyer fit for your transaction.

Marketing Materials

Investment banking professionals have developed rapport with ‘the Street’ and understand how to speak with peers through years of working together, creating lasting relationships with those who may become a strategic or financial buyer of your transaction. The Partner running your M&A transaction produces exceptional confidential investment memorandums that are of the same caliber buyers expect and are used to in the institutional market. This signals credibility and allows the market to have confidence and trust the information since it comes to them packaged professionally, thoroughly researched, which removes perceived risk and allows the transaction to proceed without hesitation and skepticism from a prospective acquirer.

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Managing an M&A Transaction

Once all advanced preparation is complete, the Partner leading your transaction will strategically distribute it through various channels in the market. This stage involves a plethora of planned and ad-hoc conversations with counterparties that often require a degree of finesse. This is because what is not said can be just as important as what is said. An experienced M&A advisor works instinctively on the deal selling each counterparty in a way that is unique to their own situation. As a direct result of this approach, the buyer takes the process and his interaction with the Partner very seriously, drawing them in so they become deeply invested in the deal and desire a successful close.

Due Diligence

All information presented in the offering memorandum before the transaction is completed. Your advisor will work together with the buyer and their attorney and advisors to review the financial statements and business documents gathered during the initial stages of the sale process. While due diligence is a critical stage of the process and can vary in length, this time is substantially reduced by the in-depth research and review conducted at the front end of the transaction.

By vetting the information in advance and establishing credibility with the prospective acquirer, your Partner will be able to secure a better outcome at closing. To learn more about the due diligence process, read Part 1 and Part 2 of our Selling Your Business series.

Closing Deals

The increased legitimacy and credibility an M&A advisor can bring to the process materially improves your position and outcome through negotiations. Many buyers have also worked in Investment Banking or similar roles; they all understand the ‘rules of the engagement’ and have more respect for your Partner’s candor and background in comparison to other types of intermediaries. These professional counterparties know they can trust the information they’ve been given and will take the materials and the Partner – and by extension you and your transaction – seriously throughout the M&A process.  This produces an outcome that is infinitely more likely to meet and exceed your goals for the transaction. 

The Global Wired Difference

Global Wired Advisors combines decades of transactional and operational expertise to provide institutional-caliber service to our Clients while helping them earn the maximum value for their digitally native or Amazon FBA businesses. If you’re considering a sale, or if you’d like to learn more about our process, click here to connect with one of our Advisors today!

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