the acquisition process acquisition investment sourcing and screening strategic operational due diligence financing preparation legal and tax structuring negotiation and closing.
The acquisition process in private Equity involves the sourcing evaluation and execution of an equity investment in a company. This is often where most new Associates Focus their time.
No, two PE acquisition processes are exactly the same and they can be complex with many twists and turns along the way.
Like with any process of buying and selling very often PE firms do not manage to finish an acquisition process.
This might be due to the private Equity Firm deciding it is no longer interested in the investment or because the vendor is no longer Keen to sell to the private Equity Firm.
The acquisition process is time consuming and draws upon the resources of the private Equity Firm, but also other firms and advisors in its Network.
investment Banks play a key role as broker advisors on most acquisition processes There are a number of types of processes including proprietary deals.
These are processes where their PE firm is. The only party in direct talks with the vendor sometimes without any advisory help.
auction processes formal sale processes where a vendor puts the target up for sale to multiple buyers who compete with each other often. This is organized by an investment bank and advisors help prepare the target for this auction.
Public to privates this is where one or more PE firms try to acquire a publicly quoted business by delisting it and taking it private and minority transaction. This is where the investing P firm takes less than 50% ownership of the target company.
Despite these differing types of Acquisitions. There are common steps within all acquisition processes.
Such as the sourcing due diligence valuation financing structuring and closing of the deal. These are the areas where funds can differentiate themselves to clinch good deals and avoid bad ones.
Time frames for completing a deal vary but typically for a PE fund for anywhere between three months to a year.
The PE Process Slides
