Every company must follow its own unique M&A process based on the goals of the merger and the plans of each company. But most M&A deals follow a fairly predictable 10-step trajectory. The general steps are as follows: 

  1. Devise an Acquisition Strategy. This strategy helps the acquirer determine what they seek from the purchase—what business synergies they may realize, which products they hope to expand, or which markets they hope to gain access to. There must be a clear reason for the acquisition. 
  2. Develop search criteria. What does a target company look like? Think about profit margins, customer base, products, location, and margins as a starting point. 
  3. Search for potential targets. Once you have your search criteria in place, begin the search in earnest. This search should also include a preliminary evaluation.
  4. Plan for the acquisition. Once you make contact with one or more suitable companies, begin preliminary discussions to assess how likely the business is to be interested in a merger. 
  5. Conduct a valuation. If the initial conversation is promising, it’s time to assess the company, including its financials. This empowers you to arrive at a reasonable price. 
  6. Begin negotiations. You should work with a professional to produce several valuation models, and based upon these models, construct a reasonable offer that you can justify. When the initial offer is presented, you can begin negotiating price and other deal terms. 
  7. M&A due diligence. Due diligence is typically the most demanding portion of the process. The goal here is to verify your valuation assessment and assess the overall health of the company. The company must provide details on every aspect of its operations, as well as documentation to support its claims. 
  8. Purchase and sale contracts creation and review. If due diligence produces no problems and no change in valuation, the next step is executing a sale contract. You’ll need a lawyer to review each detail. One of the most challenging and important steps in the acquisition process is properly structuring the deal. So seek advice from M&A experts. Don’t go it alone, and don’t blindly trust the buyer or rely on contracts you found online. 
  9. Acquisition financing strategy. You should explore financing options well before the deal begins. But final financing discussions typically begin after the sale and purchase agreement is signed. If you plan to do some form of seller financing, this must be discussed early, well before you sign any sales agreements. 
  10. Closing and integration. The integration begins in earnest when the deal closes. Your work isn’t done, though. The process of integration is ultimately what determines how successful the final entity will be. A haphazard approach to integration, cultural mismatches, and poor integration planning can all destroy the hard work you've invested in the deal. 




Ultimately, a successful M&A process hinges on having a deal team who is sufficiently knowledgeable to see the deal through to its most optimal completion. You may be an expert at running a business, but a trusted M&A team has helped sell many businesses. Rely on them to help you assess what’s typical, what needs to be done, and what you can do to support the process. 

About Madison Street Capital
Madison Street Capital is an international investment banking firm committed to integrity, excellence, leadership and service in delivering corporate financial advisory services to publicly and privately held businesses. Over the years we have helped clients in hundreds of industry verticals reach their goal in a timely manner. Our experience and understanding in areas of corporate finance and corporate governance is the reason we are a leading provider of financial advisory services, M&A, and valuations. With offices in North America, Asia and Africa, we have adopted a global view that gives equal emphasis to local business relationships and networks.