The parties need to seriously implement, it usually takes about 6 months to 1 year depending on the size and type. Successful M&A deals usually follow the following M&A procedures.
1. Building a strategy for mergers and acquisitions
For the investor (buyer): It is necessary to clearly define the target of the M&A deal such as: How to acquire? What is the purpose?. With the seller: Need to merge for what? Does the buyer help the development path or mission of the business? Clearly identifying the buyer persona will help the seller have a roadmap to build and develop the Enterprise to reach the Buyer’s goal and obtain the expected selling price of the Enterprise.
2. Search for the target company
Once the objectives of the M&A project have been determined, businesses need to develop specific criteria (business products/services, profit margins, geographical locations, customer segments, etc.) select the right target companies that are in need of merger or acquisition.
3. Access to business
When the buyer and the seller have reached an agreement to merge the business. The parties must determine the exact type of M&A transaction. This helps to properly apply the corporate law, mechanism and process to conduct transactions, build the framework of M&A contracts and define the obligations of information and notification to the management agencies of the parties.
4. Legal due diligence of enterprises
After completing the above step, the buyer has the right to request legal and financial information… in order to help the buyer understand the legal status, legal rights and obligations, and the legal regime for the buyer. types of properties, labor contracts, land records, construction, investment… of the seller. This helps minimize legal risks in corporate M&A projects. This process is usually done by the legal department or M&A consulting law office on behalf of the buyer.
5. Business valuation
Determine the existing value of the business to be merged, including both tangible and intangible assets. The business valuation requires an independent unit with sufficient legal conditions and expertise to perform to ensure the most objectivity and accuracy.
Commonly used business valuation methods are P/E Ratio, Enterprise Value to Sales (EV/Sales), Replacement
