When a business decides to sell, they have to conduct due diligence on the prospective buyer. This could be a lengthy process that involves reviewing financial statements, interviewing employees and touring facilities. During the process, it’s important for the company to do their best to extract the most value from the sale. The M&A checklist can be a helpful tool for businesses looking to do a deal.

Term Sheet

A term sheet can also be called a memorandum, or intention and outlines the commercial terms of the contract. These are legally binding documents and when they’re not written or executed in a clear manner, it could result in problems in the future.

Purchase Agreement and Letter of Intent

The next step in the process of M&A is to create the definitive purchase contract. It’s a legal document that defines the conditions of the transaction, and is signed by both parties to commit to the M&A process. The M&A procedure is then followed by due diligence, which involves checking financial records in a secure environment.

HSR filings

Under the Hart-Scott-Rodino Antitrust Improvements Act, M&A transactions that meet certain criteria have to be notified in the initial phase of premerger with securedocs the Federal Trade Commission and Department of Justice before closing the deal. This is to ensure that the merger won’t have a negative impact on competition.