Closing on a Marriage

With the CIM in our back pocket, it’s time to take the owner out on the town for the “dating” phase. We first present an anonymous snapshot of our client, known as a “Teaser,” to interested suitors. Those that demonstrate serious interest and execute a Confidentiality Agreement will receive the Confidential Information Memorandum, which reveals the company’s identity and details about its history, operations, management, financials, etc (buyers still don’t get to meet our client, though).

Soon we will ask buyers to get more serious and submit an Indication of Interest (IOI). This is non-binding, non-exclusive and includes price, deal structure, and a few key terms. We select the top candidates and finally allow the buyers and seller to “mingle” during management visits. The relationship eventually becomes exclusive when the seller selects “the one” and we negotiate a Letter of Intent, which when signed is like the “engagement.”

With closing (“the marriage”) as the final step, other parties such as attorneys and accountants get involved to facilitate due diligence and ensure everything is in order. If all goes to plan, the transaction closes and the celebration begins. There is a Motown band, a cake, champagne, dancing, and the occasional inappropriate toast. Okay, we made up some of that; but we have seen inappropriate toasts before. And dancing. And champagne. And cake. Okay, they really are pretty similar…