Maintain Control of the Sales ProcessSelling a business is serious business and it is intolerant of ambiguity and less-than-complete commitment. You need to be willing to jump in with both feet and be prepared for complete immersion into the process. The first step is to take control of the process. That means controlling the auction, the data rooms, and the document drafting. Sellers have a control advantage as long as they don't squander it. To gain control, the seller must do enough advance preparation to be in command of the information. Too often, sellers are put in a defensive position against buyers who are running a finetooth comb over the business and demanding information and answers. Sellers won't be in an underdog position if they do their own due diligence. A thorough understanding of their company will help them gain some leverage at the bargaining table. If they proactively manage the due diligence process and can provide buyers with quality information, they can take control over the diligence process. Deal makers often focus on who is in control of the process. When you are in control, you are setting the pace of the transaction and determining the priority of the negotiations and discussions. Control the AuctionTo control the auction process, the seller should ensure that bidders are managed and treated consistently. In addition, the seller will want to control the timing and nature of the information flows and will want to be sure that a coordinated message is communicated to all of the bidders. The ideal situation for any auction is to keep at least two bidders interested in the target up to and including the negotiation of terms and conditions. In a well-controlled auction, a seller can use the element of competition to mitigate the impact of bad news. For instance, if a seller knows that there are shifts in the business that are negative, such as coststructure increases or customer changes, then the seller may want to mitigate the potential damage. If the seller can control the release of the potentially adverse information, it can force the bidders to incorporate this data into their valuations and deliberations when the element of competition forces them to view the situation as positively as possible. If the seller waits and delivers the "bad news" to the final bidder in the final stages of the negotiation process, this information could be heavily negotiated and may kill the deal. Control the Data RoomsOften, a seller will decide, in a competitive sales process, that the most efficient means of making information available to prospective buyers is to set up a data room containing all relevant information. A data room is particularly useful when there is more than one interested buyer because it ensures that all parties have access to the same information.Sellers need to know what information is in the data rooms and ensure that it is accurate and consistent with the selling documentation and that it can be followed and traced from document to document. If a seller has inconsistent data, ...

Executing a merger and acquisition (M&A) deal in today's economy, with tighter credit markets and increasing concerns about the impact of the subprime lending crisis, requires an effective strategy that will ensure you do the right deal at the right price. The authors reveal what makes a successful deal strategy today. © 2008 Wiley Periodicals, Inc. information and to leverage the deal stakeholders' collective knowledge. It should also allow all parties involved in the deal to collaborate and share information on a real-time basis in a way that was not possible a few years ago.All too often, deal making is done in a secretive "art-like" process where information is held tightly by a small group of carefully selected deal insiders. This is often done for some very obvious and good reasons, but it naturally tilts the environment away from transparency. Unfortunately, the deal world is usually done in an environment where perfect information is rarely available and not sharing information can be limiting and costly.Too often, a market development or due diligence finding is known by part of the deal team but is not shared with the other members. This lack of communication can cause the deal to derail because the information is not widely known and, therefore, not considered in the process. For example, the compliance or legal team may discover information about some questionable conduct of a key agent of the target company. If this information is not shared with the commercial or financial team, they may not consider it in their models. Consequently, the tax team may not properly assess the negative tax consequences of these actions. Committed PeopleEvery deal needs a champion, who is responsible for all deal activities. This champion needs to be supported by committed people in every functional area. Without exception, worldclass acquirers have centralized acquisition teams that report directly to the chief executive and have the ability to exercise peer-level influence over the various business units, infrastructure services, and corporate development. This structure helps break down the silo mentality, encourages collaboration, Doing the Right DealsExhibit 1and enhances a company's chance for success. The team is usually headed by a business unit leader and should include a dedicated integration specialist. This is important because underestimating the integration issues and complexity will often result in an unsupportable valuation model and protracted transition process. Outside experts are often included to supplement internal resources. All acquisition team members should fully understand and follow the firm's standardized process for managing transactions.As cliché as it sounds, all teams are only as good as their leaders. The need to have a clear leader who has the ability to execute the leadership role and the stature in the organization to overcome difficult obstacles is essential. Deals often fail because companies do not put enough "talent" in the leadership roles and/or the leaders do not have the ...

The economy has greatly hindered merger‐and‐acquisition (M&A) deal makers over the past few years. But deals are still being made‐especially when both parties are willing to be creative in structuring the deal. Then the lack of cash and credit can be overcome. The authors look at some of the innovative deal structures being used to overcome obstacles of our tough, slumping economy. © 2011 Wiley Periodicals, Inc.