Simplifying The M&A Q&A Process

M&A deals are complex transactions involving a multitude of bankers, lawyers, accountants and other stakeholders in diverse locations. For practitioners, the use of software available to remove as much of this complexity as possible when handling documents and communicating is crucial.

At ansarada, we’ve sat at the nexus of more than 10,000 global M&A deals that have used our virtual data rooms over the past decade. We’ve seen deal makers set out very clear protocols in advance about how deals are to be executed and share our top three tips below based on the best practices employed.

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Set question limits

In a typical M&A deal, more than two-thirds of the time is spent running the Q&A process. Hundreds, sometimes thousands, of questions are posed during a process that can extend to several months.

Limiting the number of questions each potential bidder can ask at any time focuses the parties and results in prioritisation. Instead of bombarding the seller, the buyers are forced to ask the questions that really matter to them in logical order.

Some of the most successful protocols will add priority and response times into these. For example, the seller may undertake to answer high priority questions in 24 hours, but limit bidders to asking only two such questions per day.

Manage the Q&A workflow by reducing decision time

In a typical deal, each question submitted to the process is assigned to an analyst whose responsibility it is to investigate and respond, or to assign to someone else in the deal team to answer.

A sophisticated deal reduces the decision time involved in evaluating each question by setting a predetermined list of subjects for the bidder to categorise their question and constructing a corresponding sell side workflow. For example, questions with the subject “tax” are assigned to the tax accountant, “financing” to the lead banker, and so on. A virtual data room can also be used to automate this process.

Secure questions by subject

Virtual data rooms allow for security and confidentiality around questions that are categorised by subject. In practical terms, this means that a question and answer around employee contracts and conditions can be quarantined from all but the most essential eyes, ensuring it is safe to include a broader range of participants in the entire Q&A process. With this virtual data room feature, the workload involved in answering questions is more broadly shared, without compromising security.