The Life Cycle of M&A is the journey of the entire M&A transaction: its birth, development, and execution. The execution is the final stage where two possible outcomes may arise based on the success or failure of the process: either death or completion/transcendence.
Thus, we can understand the entire process of the M&A transaction, its Life Cycle, in 3 phases:
I. The Birth /Initiation
The Negotiation stage is the true birth of the M&A deal. The intent, idea and planning part of the deal originates through negotiation.
It gains life.
It is the first step in the Life Cycle of the deal. The birth occurs when the Non-Disclosure Agreement is entered into between the parties as they now have a contractual relationship.
II. Growth and Development
After the negotiations are complete, the deal starts to develop. Various stages advance the growth of the deal.
Just as a zygote matures into a fetus, the idea to merge is solidified in negotiations. As each step of M&A is completed; the deal becomes more tangible and dynamic.
It grows.
The following steps in the Life Cycle belong in the Growth Phase:
· Conducting Due Diligence Assessments
· Preparing the necessary Documentation
· Undertaking Risk Assessments
· Getting Valuations
III. Execution
This phase will primarily consist of getting the final approvals for the M&A deal, its execution and post M&A compliance. The following steps in the Life Cycle belong in the Execution Phase:
(i) Approvals
(ii) Gathering funds
(iii) Finalization
(iv) Post M&A Compliance and Integration
In the following articles, we will discuss and understand the Life Cycle in each of its stages.
