Board Portals Can Streamline Due Diligence Prep Work And Speed Up Your M&A Acquisition

Mergers and acquisitions (M&A) can change the life of startup founders and their teams. Find out how board management software can help.

Board Portals Can Streamline Due Diligence Prep Work And Speed Up Your M&A Acquisition

Mergers and acquisitions (M&A) can change the life of startup founders and their teams. A merger or acquisition can culminate many years of hard work, but it can also catch a company off guard. Have you ever wondered how long an M&A deal takes to complete? The process may seem daunting initially, but understanding the basics will help you stay calm and make good decisions when things get crazy.

Understanding these dynamics is essential to make the most of your M&A opportunities. This blog post will discuss these issues and show how they’ve affected past mergers.

Overview of the M&A process

A typical M&A transaction generally consists of the following steps:

  • Preliminary discussions and non-disclosure agreements
  • Assessment and evaluation of the target
  • Due diligence in a Board Portal
  • Signing the contract and closing the deal
  • Post deal integration

First, let’s talk about the length of the M&A process. On average, the process can take anywhere from three to six months. Still, depending on the deal’s complexity, it can take longer or shorter. Factors such as the size of the company, the number of assets involved, and the number of parties involved can all impact the length of the process.

One of the most significant factors that can speed up the M&A process is having the right team. This includes experienced professionals who can navigate the legal and financial aspects of the deal. In addition, having the right team in place can help ensure that all necessary documents and information are collected and reviewed on time.

  • Lawyers: Attorneys take care of the company purchase agreements and prepare the appendices, among other things. These are of particular importance.
  • Tax consultants: Tax consultants take over the tax structuring of the company transaction and optimize it accordingly. Because, as with any purchase, there are taxes to pay.
  • M&A advisor: Most companies will want specialist advice. The M&A advisors manage and organize the M&A process, from identifying potential investors to preparing relevant documents to negotiate the purchase price.
  • Auditors: Auditors come along to take care of the due diligence and ensure that both businesses are accurately represented.

M&A Due Diligence Prep Work

Another factor that can speed up the M&A process is being prepared. Unfortunately, the process can be delayed or fall apart without proper documentation. The M&A process typically involves a variety of legal and financial documents, such as purchase agreements, due diligence reports, and financial statements. These documents are used to ensure that the transaction is structured correctly, that the terms of the deal are clear and agreed upon, and that the buyer is getting a fair deal. As a result, the process can be slowed down or even halted without these documents. This can lead to delays in closing the sale and ultimately result in the deal falling apart.

Another potential issue when owners need the necessary documentation is that they may need to prove their company ownership. This can be a significant problem if the buyer is willing to proceed with the transaction with proof of ownership. Additionally, with proper documentation, the buyer may be able to obtain financing for the deal or may be able to pay a higher price for the company.

Valuations also play an essential role in the M&A process. A company’s valuation is an estimate of its worth. It is typically determined through various methods, such as discounted cash flow analysis and comparable company analysis. The valuation is used to determine the price that the buyer will pay for the company. If the valuation is too high, the buyer may be unwilling to proceed with the deal. At the same time, the seller may be willing to accept the offer if it is higher.

Board Portals Can Streamline Due Diligence Prep Work And Speed Up Your M&A Acquisition

When it comes to mergers and acquisitions, it’s essential to have the right tools in place to make the process as smooth and efficient as possible. One such tool is a board portal. Let me show you how a Board Director’s board portal can help streamline the M&A process, how the lack of one can cost you millions or even blow up the deal, and why getting started now is essential.

A single mistake or delay in the process can cost you millions or even blow up the deal entirely. That’s why it’s crucial to have a system in place to keep everything running smoothly. And that’s precisely what a board portal does.

A board portal, like Board Director, is a digital platform that allows all parties involved in the M&A process to access and share important documents, such as financial statements and legal documents, in a secure and organized way. This means that all the information you need for the M&A process is in one place, making it easy to access and share with the right people.

What documents does a startup need for a M&A Deal transaction

A startup that is involved in a merger and acquisition (M&A) deal will typically need to provide the following types of documents:

Financial statements: This will include the startup’s balance sheet, income statement, and cash flow statement. These documents will provide information on the company’s financial performance and position.

Operating agreements: These agreements will provide information on the company’s ownership structure, management, and decision-making processes.

Legal documents: This will include the company’s articles of incorporation, bylaws, and any other relevant legal documents that provide information on the company’s structure and operations.

Contracts: This will include any contracts that the company has entered into, such as leases, supplier agreements, and employment agreements.

Intellectual property: This will include any patents, trademarks, and copyrights that the company holds, as well as any licenses or agreements related to intellectual property.

Due Diligence: This will include all the materials that will be provided to the acquirer for them to review and assess the target company’s financial, legal, and operational situation.

Earn-out agreements: This will include the agreements that set the terms for the payment of the remaining part of the purchase price, if any, that will be paid after the closing of the transaction.

Closing documents: this will include all the documents that will be signed by both parties upon completion of the transaction.

Keep in mind that the list of documents required may vary depending on the specific circumstances of the M&A deal and the jurisdiction in which the transaction is taking place.

Here are 25 potential documents needed for due diligence:

  • Company and legal structure
  • Trade register excerpts
  • Licenses, approvals, permits, and certificates
  • Shareholders’ agreement
  • Corporate history
  • Articles of incorporation
  • By-laws
  • Lists of all current shareholders
  • List of all officers and directors
  • Overview of IP and Trademarks
  • Standard customer contracts
  • List of the company’s 20 biggest customers or channels
  • Top three supplier agreements
  • List and details of employees
  • Contracts of key employees
  • Standard working contracts
  • CVs of key personnel
  • List of all lease agreements
  • Guarantees
  • Financing agreements
  • List and details of insurance policies
  • Audited financial statements
  • Current management reporting
  • Current business plan
  • Tax accounts

One of the most significant benefits of a board portal is that it allows for real-time collaboration. This means that all parties involved in the M&A process can access and share the same information simultaneously, saving a lot of time and hassle. Instead of sending documents back and forth via email, everyone can work on the same version of the document, making it easier to make changes and ensure that everyone is on the same page.

And let’s remember due diligence. A board portal makes it easy to track where you are in the process and what still needs to be done. This can be especially helpful in due diligence, as it ensures that all necessary information is collected and reviewed promptly.

In conclusion, a board portal is a must-have tool for companies looking to make the most of their M&A opportunities. It streamlines the process, allows real-time collaboration, and keeps you organized and on track. But why wait? Time is money, and the M&A process is no exception. Therefore, the sooner you have a board portal in place, the sooner you can start streamlining the process and making the most of your M&A opportunities. Sign up for a FREE Trial.

How Can A Board Portal Help Your Board and Organization?

Board management software can provide many benefits for startups, including:

Improved communication and collaboration: Board management software allows all board members to share and access important documents, information, and updates in real time.

Increased efficiency and productivity: Board management software automates many of the tasks involved in board meetings, such as scheduling and agenda-setting, which can save time and reduce the administrative burden on board members.

Enhanced security and compliance: Board management software can help ensure that sensitive information is kept confidential and that the startup complies with legal and regulatory requirements.

Better decision-making: Board management software can provide tools for tracking and analyzing key performance indicators, which can help the board make more informed decisions.

Reduced costs: Board management software can help reduce the costs associated with printing and distributing paper documents and the costs associated with travel and lodging for board meetings.

Sign up for a FREE Trial Today.