Chapter 5 - Implementation: search through closing: phases 3 to 10 of the acquisition process

Abstract

Big data, data analytics, artificial intelligence, block chains, and smart contracting are tools that are increasingly applied to the mergers and acquisitions (M&A) process. To what extent do they offer promising solutions to challenging problems? And to what extent are they overhyped? These are among the questions addressed in this chapter, which presumes that a firm has developed a viable business plan requiring an acquisition to implement its business strategy. Whereas the preceding chapter addressed the creation of business and acquisition plans (phases 1 and 2), this chapter focuses on phases 3 to 10 of the M&A process, including search, screening, first contact, negotiation, integration planning, closing, integration implementation, and evaluation. Search and screening potential targets focus on developing appropriate selection criteria, while first contact details strategies for discussing price and developing preliminary legal documents. The negotiation phase involves refining valuation, deal structuring, conducting due diligence, and developing a financing plan. Integration planning addresses the challenges of postacquisition integration of the target. Closing is about the transfer of ownership, resolving transition issues, and completing the merger agreement. Postclosing integration deals with developing communication plans, employee retention, resolving cultural issues, satisfying immediate cash flow requirements, and using best practices. And postclosing evaluation encompasses learning from previous mistakes.