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Investment Banking · Topic lesson

M&A Process

How a company is sold: choosing the process, the buyer funnel, the timeline to signing and closing, and how the advisors are paid.

3 chapters About 30 minutes0 of 3 complete
Start chapter 1

Much of an M&A banker's job is running the sale itself: deciding who to call, keeping the process moving, and getting the deal from launch to closing without losing price or the buyer. Interviewers test whether you understand how that works, not just the valuation behind it. This lesson follows a sell-side mandate; on the buy-side, the bank helps a client screen targets, value them, make the approach, and arrange diligence and financing.

  • The process decides who is invited to bid, trading price tension against speed, certainty and confidentiality.
  • The documents move commitment forward one step at a time: a teaser, an NDA, the confidential information memorandum (CIM), a non-binding indication of interest (IOI), a letter of intent (LOI) that often grants exclusivity, and finally the binding purchase agreement.
  • The timeline runs in sequence up to signing, then waits on conditions that run side by side until closing.
  • The fees are mostly paid on success, as a share of the price, with terms designed to line the bank's interests up with the seller's.
The rule that solves every question

Ask what the seller values most (price, certainty, speed or secrecy) and design around it. Then do the arithmetic in the right order: a funnel narrows stage by stage, sequential phases add up, and parallel conditions take the longest.

How a sale runs

From choosing the process to getting paid. Each step points to the chapter that practices it.

  1. 1
    Choose the process

    Broad, targeted, negotiated or dual-track, to fit the buyers and the seller.

    Chapter 1
  2. 2
    Work the buyer funnel

    Contacts, NDAs, first-round bids, final bidders.

    Chapter 1
  3. 3
    Run to signing

    Preparation, marketing, bids, diligence and negotiation, one after another.

    Chapter 2
  4. 4
    Clear the conditions

    Antitrust, votes and reviews run in parallel; the slowest decides the closing date.

    Chapter 2
  5. 5
    Get paid at closing

    Success fee, incentive, retainer credit and fairness opinion.

    Chapter 3

Chapters

1

Choosing the sale process

11 min

Broad auction, targeted auction, negotiated sale or dual-track: price against certainty, speed and secrecy.

  • Describe the four main sale processes and what each trades away
  • Recommend a process from the buyer universe and what the seller cares about
  • Run the buyer funnel from first contact to final bidders
  • Work out how many parties to contact for the final round you want
2

Deal timeline and gating items

10 min

Phases before signing add up; conditions after signing overlap, so the slowest one sets the closing date.

  • Add up the phases from launch to signing
  • Explain why the time from signing to closing is the longest condition, not the sum
  • Identify the gating item and what it means for deal risk
  • Work out a missing phase from the total
3

How advisors are paid

9 min

Success fees, incentive fees, retainers and fairness opinions, and the effective rate they add up to.

  • Calculate a success fee with an incentive above a hurdle
  • Apply a retainer credit and a fairness opinion fee
  • Work back from the fee to the price achieved
  • Explain how fee structures shape the bank's incentives