Welcome to the sell-side

Someone's got something to sell. They might be a corporation, a private equity fund - the list goes on - but let's just call them 'the seller'. Your role, as investment banker, is to help make that happen and deliver the best value possible. Here's how.

1. Preparing the deal

Everything starts with the seller. First, they select their advisors (you're one of them). Then they'll usually sign a letter of engagement, and agree a strategy and timeline for the deal. 

This is when you'll be gathering info: collecting the financial statements, operating data, and management information. You'll be looking up similar comparable deals (known as 'comps') to help set a realistic price. And you'll be drafting the information request list - the long list of documents that the seller will need to share with the eventual buyer in your secure space: the data room. 

Speaking of which - you can assemble some or all of that material in advance, using Datasite Prepare. This saves you from rushing later on.

2. To market!

Now the seller wants to make their asset as enticing to buyers as possible. You can really help here. 

You'll draft the teaser - a short summary which describes what's for sale, without actually naming it. You'll also draft the Confidential Information Memorandum (CIM) - a more detailed, but just as anonymous profile.

And you'll work with the seller to prepare financial models and projections. All the stuff that says, 'Buy me'.

3. Reaching out

Next, you and your seller want a list of potential buyers. You'll help them identify likely bidders via your respective networks, and any interested parties will sign a non-disclosure agreement (NDA). 

It's your task to build and maintain this list of buyers, keeping track of who's been approached, and distributing the teaser and CIM once the NDA is signed. Luckily, you can handle all of the securely in one place: Datasite Outreach.

4. Start the bidding! 

It's time for the early bids to start coming in. These are known as indications of interest (IOIs). Though not legally binding, as the name indicates, they're...indicative. 

But we forgot something! The process letters need to go out. These are a whole topic in themselves - but essential. They are the roadmap for bidders, telling them what's expected of them, and what they can expect in return. 

You'll keep track of their IOIs, and prepare an analysis of the competing bids for your seller. This might include metrics such as price, certainty, timing, conditionality, regulatory risk, and financing sources.

5. Kickoff

It may come as a surprise, but many dealmakers would say that your deal hasn't yet begun. What's known as 'deal kickoff' is widely considered to be one key moment: the opening of the data room. 

Kickoff is also marked by a crucial meeting, at which the seller's management team delivers a presentation to the prospective buyer. You'll need to help create the slides for this presentation, with the key information you assembled earlier. 

But the critical task is the setting up of the data room. Ideally, you'll have done most of this already in Datasite Prepare. However, now you'll be using Datasite Diligence - the live version that allows for secure sharing with bidders.

One of the most useful tools for you now is your trackers - a centralized checklist of tasks that will ensure all requested content is uploaded and organized. Note also that a lot of content within many documents will need to be hidden from bidders, at least initially. For this, you can use redaction to identify sensitive information and conceal it until it's time to share it. 

6. Let's do the due diligence

This is the part where buyers kick tires. They're looking for any reason why they shouldn't buy this asset - or more likely, any way to lower the price. So it's a bit like a house survey.

Conversely, this is when the seller wants to hike the bids as high as possible. So it's your task to ensure buyers are bigly impressed. So they must find everything they need in the data room, get all their questions answered quickly and accurately, and enjoy a process that's as smooth as possible. 

You'll use the central Q&A feature in Datasite Diligence to handle the back-and-forth of questions, and keep the data room updated using those invaluable trackers.

7. And, sold!

Now it's for the seller to consider the final bids, select a winner, and negotiate final terms. 

You'll help prepare comparison analyses to help select the most attractive bid. Your valuation models may also need to be updated to reflect the way the deal is now structured. You may help to draft some of the board materials, such as the bid summary, valuation ranges and the deal rationale. And there may be certain analysis needed along the way, to assist with negotiations - you'll help with that too.

At the conclusion of negotiations, the buyer and the seller both sign the Sale & Purchase Agreement (SPA). Now the deal is (almost!) sealed.

8. Closing time

We're now into the home stretch. Typically there are certain closing conditions to satisfy - such as getting regulatory approval, acquiring third-party consent, etc. And of course, the funds have to be transferred. 

You'll be helping to tie up loose ends and ensure a smooth transition. Tasks might include helping to prepare closing decks and press release materials, now that the deal can finally be made public - you want it to appear with a bang, not a whimper.

You might also offer support in funds flow analysis, to make sure the money goes through as agreed. 

A particularly important task is preserving a complete record of the deal - including CIMs, models, presentations, and the entire data room as it was left. This is crucial, as it will help to protect the seller against any future legal challenges. If you used Datasite Diligence, then your deal will be automatically preserved in Datasite Archive. 

And that's your deal - done! For a confidence boost on both sides of M&A, check out our Sell-side and Buy-side Navigation Guide.