the acquisition phase concurrently to interaction with investment targets and external advisors private Equity professionals will have to follow internal firm processes and perform project management while these may vary slightly from fun to fund. They will all revolve around certain duties during either the acquisition monitoring or exit phases of the private Equity deal. The acquisition process will include the following internal steps.
Still screening memos and meetings will take place between private Equity teams on a regular basis often weekly to go through shortlists of potential targets and discuss or analyze the Merit in pursuing each of them. Some basic information is put together and maintained in a pipeline spreadsheet or map. This information will be high level and often includes the status of whether the asset is available the size sector geography and key relationships, the private Equity Firm has which are connected to it for some of the targets preview notes or screening memos will be put together. These will be a few pages in length and when include our transaction summary short business and industry overview and next steps.
Once the process has started the first Major meeting based on preliminary due diligence will be the investment committee meeting where the deal team presents the opportunity in detail.
The document that the team will have put together will be the preliminary investment memorandum or Pim and will include an executive overview detailing the transaction opportunity a thorough description of the business the industry in which it operates financials valuation management details expected capital structure process timeline and suggested next steps depending on the firm. These can range from a short ten slide document to very lengthy hundred page books. This document will allow the investment committee to decide whether the private Equity Firm should continue evaluating the transaction thereby spending more time and more money on the deal.
If a green light was given after the Pim the deal team will continue with formal due diligence and keep updating the investment committee informally as to how the deal is progressing at this point. The deal team will have its hands full with the external processes. Any red flags would be pointed out during the regular weekly or even daily deal team meetings.
The next big internal step will be the final investment committee memorandum fim and meeting. This document is often focused on addressing the concern areas from due diligence the final valuation and bid proposal structuring highlights financing details business plan and steps required to closing the approval sort will be to submit a legally binding bid and acquire the business. These meetings are normally quite tense as a lot of work and time has gone into getting to this stage and the deal team may have many external processes ongoing to close the transaction.
If an approval was received at the fim meeting the team will push forward on submitting a binding bid arranged the equity and debt funding execute structure plans and prepare for signing of legal documentation.
Once signing is complete internal meetings will take place to coordinate Capital calls from the LPS and wiring of funds. This is normally led by the private Equity firms CFO or head of investor relations a notes or final meeting to debrief the investment committee may take place at this point or can be done informally.
