M&A Process: What Actually Happens From Mandate to Close

The Sell-Side Process in 11 Steps

A sell-side M&A process typically takes 4-6 months. Here is what happens at each stage:

1. Engagement letter: The bank is formally hired. Scope, fees, and exclusivity are agreed.

2. Due diligence and CIM preparation: The bank conducts sell-side diligence and prepares the Confidential Information Memorandum — the 50-100 page marketing document for the company.

3. Buyer universe: The bank identifies and screens potential buyers (strategic and financial), then gets client approval on the list.

4. Teaser distribution: An anonymous one-page summary is sent to potential buyers to gauge interest. No company name is revealed.

5. NDA and CIM: Interested buyers sign NDAs and receive the full CIM with company details, financials, and investment highlights.

6. First round bids (IOIs): Buyers submit non-binding Indications of Interest, typically including a valuation range and high-level terms.

7. Management presentations: Shortlisted buyers meet the management team in 2-3 hour sessions covering strategy, operations, and financials.

8. Data room access: Selected buyers get access to the virtual data room for detailed due diligence (financial, legal, commercial, tax).

9. Final bids: Buyers submit binding offers with a marked-up SPA. Price, structure, and conditions are firm.

10. Negotiation and signing: The bank negotiates final terms with the preferred buyer. The SPA is executed.

11. Close: Regulatory approvals obtained if needed. Consideration is paid. Ownership transfers.

Key Documents

Teaser: Anonymous one-pager with key metrics. Prepared by the sell-side bank.

CIM: The marketing document. Contains company overview, financials, growth strategy, and investment highlights. 50-100 pages.

IOI: Non-binding preliminary offer from a buyer. Includes a valuation range.

SPA: The binding legal contract. Prepared by legal counsel on both sides.

Fairness Opinion: Independent assessment that the price is fair to shareholders. Often required for public company deals.

How Interviewers Test This

The most common question: "Walk me through a sell-side M&A process." Structure your answer in three phases: Preparation (engagement, CIM, buyer list), Marketing (teaser, NDA, first round, management presentations), and Execution (data room, final bids, negotiation, close).

Follow-up: "What is the difference between an IOI and a final bid?" An IOI is non-binding with a range; a final bid is binding with a specific price and marked-up SPA.

Take Your Preparation Further

Download our free M&A Process Cheat Sheet for the complete process, key documents table, and interview Q&As. For a hands-on merger model, see the Merger Model Template.

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