In the dynamic world of private equity investing, it can feel like a constant race against time.
For deal team members, it can often feel like a life-or-death situation, working through an extensive list of items that must be checked off swiftly to bring the deal to fruition.
Having crunched the data on tens of recent lists, the below are the twenty most crucial steps that are common to most of them (not necessarily in chronological order):
- Preparation and submission of the initial offer / bid
- Agree NDA
- Advisor selection and scoping
- Management meetings and site visits
- Preparing and submitting IRLs / DDQs and obtaining access to a comprehensive list of documents
- Q&A sessions
- Reviewing diligence findings
- Summarizing diligence reports and advisor recommendations into actionable insights
- Securing one or more IC approvals
- Preparation and submission of updated and final bid(s) / offer(s)
- Securing debt financing
- Potentially securing co-investor financing
- Exploring transaction insurance (RWI/W&I and Contingent Risk)
- Preparing / commenting on first draft docs
- Finalising docs
- Preparing LTIP
- Preparing / making press releases
- Preparing / making regulatory submissions
- Finalising value creation plans
- Hiring management teams
Bankers and deal teams put in long hours during the transaction process. Given the number of tasks at hand, diligence risks can easily slip through the gaps. Deals are becoming more complex due to regulatory challenges.
Anticipating an increase in the list of items and checklists in the coming years, it would be interesting to learn about the risk management processes and frameworks implemented by fund managers to ensure successful navigation through these tasks.
