M&A Management Meeting Logistics - dummies

By Bill Snow

Although the purpose of the M&A management meeting is for Seller to impart information to Buyer, Seller shouldn’t forget the goal of the meeting: to eventually obtain a letter of intent (LOI) from Buyer.

Before the Buyer and Seller can get to the LOI, they need to go through the song-and-dance routine of the management meeting.

Seller’s team should run the management meeting; Buyer is Seller’s guest. Seller does a lot of talking, explaining, and updating. Buyer takes notes, occasionally interjecting with clarifying questions.

Assemble key players

Some combination of Seller’s ownership and management should attend. Of course, who exactly that entails varies from company to company, but basically the attendees should encompass people who can answer questions about day-to-day operations, the current and future financing needs of the company, and decisions made at the board level.

In some cases, one person can address all these aspects, but more often than not these three broad areas require multiple people. Seller should also have her intermediary in attendance. In fact, that person will probably play the role of the emcee for the meeting.

Buyers should bring the people responsible for making the final decision. This group may include the president or CEO, the CFO, and sundry corporate development people.

People who aren’t decision-makers (or influencers to the decision-makers) shouldn’t attend. They aren’t needed at this juncture. If Buyer is utilizing outside financing, allowing the financing source to attend the management meeting may be permissible. Lastly, if Buyer has an intermediary, that intermediary will probably attend the meeting.

If occasional detailed information (say, the new marketing plan) needs discussing, bringing in a specific person (in this case, the VP of marketing) to cover just that issue is okay. But that’s the only part of the meeting that person is involved in.

Lawyers and accountants shouldn’t attend the management meeting! The meeting is for the businesspeople to discuss business issues, which are separate from legal/accounting issues. Although very important legal and accounting issues need to be settled or determined at some time, the management meeting isn’t that time. Lawyers and accountants can later memorialize what the deal people create.

Agree on a venue

The meeting location largely depends on the type of company. Service firms probably don’t hold the meetings their offices because the offices aren’t that important; they don’t have manufacturing equipment and inventory that a Buyer may like to see. Instead, a service-firm Seller should utilize the office of her intermediary.

Traipsing a series of strangers through the office only tips off the employees. Most Sellers don’t want employees to know the company is for sale, but employees figure out pretty quickly that the hush-hush and unannounced meetings with mysterious people probably means the company is for sale.

If Seller is a distributor or manufacturer, Buyer may want to see the facility. This desire makes sense and is a reasonable request. In this case, the meetings may be held at Seller’s facility.

Another option is to conduct the meetings off-site at a nearby hotel (if the intermediary’s office isn’t close). Seller can then take Buyer to the facility for a walk-though before returning to the hotel to continue the meeting.

As Seller, schedule a stealthy facilities tour if you’re especially concerned about employees figuring out the company is for sale. Give the tour after hours or on a day the facility isn’t in use.