From first contact to letter of intent
The M&A process usually opens with confidential conversations under a nondisclosure agreement, followed by an exchange of high-level financial and business information. In a sale run by an investment bank, several potential buyers may receive the same materials and submit indications of interest on a structured timetable. Once a buyer is selected, the parties often sign a letter of intent or term sheet setting out price, structure, and key conditions, along with exclusivity that keeps the seller from shopping the deal for a period. Most of a letter of intent is typically nonbinding, but the confidentiality and exclusivity terms usually are binding. The more the letter settles, the fewer surprises tend to come later.
Diligence, documents, and approvals
Due diligence runs alongside the drafting of the definitive agreement, and findings from one often change the other. The purchase agreement allocates risk through representations, covenants, closing conditions, and indemnification, and sellers prepare disclosure schedules that list exceptions to their representations. Board approval is generally needed, and depending on the structure and the governing documents, shareholder approval may be needed too. Larger transactions may require a premerger notification to the FTC and the Department of Justice, with a waiting period before closing, and deals involving foreign buyers or regulated industries can add reviews by other agencies. Third-party consents under leases, licenses, and customer contracts are often the slowest items to collect.
Signing, closing, and what follows
Some deals sign and close on the same day, while others sign first and close after approvals and consents arrive, with covenants governing how the business is run in between. At closing, funds move, ownership transfers, and ancillary documents such as employment agreements, transition services, and escrow arrangements take effect. Post-closing work can include purchase price adjustments, earnout measurement, and claims under the indemnity provisions, which is where many disputes surface. Integrating employees, systems, and contracts is a business task, but it carries legal steps of its own. When we join a deal, we map where it sits in this sequence and which decisions are coming next.
