A M&A process takes 6 to 12 months on average, where smaller transactions are quicker and complex international acquisitions can take longer. The duration depends on factors such as company size, due diligence scope, financing structure and regulatory approvals. A well-structured process with professional guidance significantly shortens the turnaround time.
What is the average length of an M&A process?
The average lead time of an M&A process is between 6 and 12 months for mid-market transactions. Smaller corporate acquisitions can be completed within 4 to 6 months, while complex mergers or international transactions can take 12 to 18 months.
The timeline varies by transaction type. Strategic acquisitions by existing market players are often faster than private equity transactions, which require more extensive due diligence. Buy-and-build strategies within an existing platform can be realised within 3 to 6 months.
Carve-outs and complex restructurings take more time because of the need for operational separation and legal unbundling. These processes often require 9 to 15 months for full resolution.
What factors determine how long a M & A-process takes?
Company size constitutes a crucial factor in M&A process duration. Companies with revenues above €50 million require more extensive due diligence and more complex financing structures, which can extend the timeline by 3 to 6 months.
The complexity of the transaction structure significantly determines the lead time. Transactions with earn-out structures, management participations or international components require more negotiation time and legal elaboration.
Regulatory approvals can significantly delay the process. Transactions requiring competition supervision or operating in regulated sectors such as financial services or healthcare have longer processing times.
The financing structure plays a decisive role. Transactions with complex debt financing or multiple financing rounds take longer than cash transactions or simple bank loans.
What are the different stages of an M&A process and their duration?
The M&A process consists of five main phases with specific durations for each phase. Preparation and market approach take 6 to 10 weeks, followed by due diligence of 8 to 12 weeks and negotiations of 4 to 8 weeks.
The preparation phase includes financial clean-up, valuation studies and preparation of market documentation. Thorough preparation prevents surprises at later stages and shortens the overall turnaround time.
During the market approach, potential buyers are identified and approached through teasers and management presentations. This phase results in indicative bids and selection of final candidates.
The due diligence phase is often the most time-consuming part. A well-structured data room and tightly coordinated question-and-answer process prevent delays and repeat queries.
Negotiations and legal documentation run in parallel and culminate in the signing of the purchase agreement. Closing takes place after all conditions precedent are fulfilled.
Why do some merger-processes longer than expected?
Incomplete financial documentation is the most common cause of delays. Missing figures, unclear accounting principles or insufficient management reporting lead to additional questions and extensive due diligence.
Complex valuations at companies with unique assets, intangible assets or volatile cash flows require more time for analysis and consensus between parties. Disagreements on valuation methodologies can delay negotiations.
Regulatory procedures do not always run as planned. Competition authorities may request additional information or impose conditions requiring renegotiation of deal terms.
Financing problems arise when credit markets deteriorate or the target company fails to meet bank conditions. This can lead to restructuring of the deal or search for alternative financing.
Unexpected due diligence findings such as legal disputes, compliance issues or operational problems require additional investigation and can affect deal terms.
How can you speed up an M&A process without sacrificing quality?
Early preparation with professional guidance significantly shortens the overall turnaround time. An exit readiness scan identifies areas for improvement and optimises the business for a future transaction.
Parallel workflows enable efficient process management. Due diligence, financing arrangements and legal documentation can be carried out simultaneously with adequate project coordination.
A streamlined process focused on value maximisation avoids unnecessary delays. Clear planning, phasing and lines of communication keep all parties on the same page.
Proactive communication with all parties involved prevents misunderstandings and delayed decision-making. Regular status updates and escalation procedures ensure timely problem resolution.
Professional process guidance and coordination by experienced M&A advisers ensures predictable, controlled processes that bring transactions to closing without unnecessary delays.
When is it wise to have a takeover-process down?
Fundamental valuation differences that cannot be bridged after extensive negotiations warrant litigation termination. When parties are more than 25% apart on enterprise value, consensus is often unattainable.
Material due diligence findings that undermine the business case are legitimate grounds for litigation termination. These include hidden liabilities, compliance violations or operational problems.
Insurmountable financing problems make continuation pointless. When banks refuse credit or market conditions make financing impossible, the process must be stopped.
Strategic realignment of buyer or seller may justify process termination. Changing market conditions or internal priorities may remove the rationale for the transaction.
Regular review of process progress and exit criteria prevents wasted time and resources. An experienced M&A advisor helps recognise warning signs and formulate alternative strategies.
The duration of an M&A process depends on careful preparation, professional guidance and realistic expectations. With the right approach and expertise, transactions can be realised efficiently within acceptable timelines. For specific advice on your M&A process, you can contact with us.
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