Exit Big: A Sell-Side Primer On Private M&A Auctions

Sellers use auctions to create competitive tension in pursuit of better deal value, deal terms, and deal certainty. The sellers’ control over the auction’s timing and process also allows them to plan and deploy a target and market-specific auction strategy.

To help sellers exit successfully, we’ve gathered our high-level thoughts on sell-side strategy in private M&A auctions.^[1] We discuss:

• Confidentiality, the process letter and the draft purchase agreement.
• Evaluating bids and granting exclusivity.
• Sellers’ alignment, rollovers, and restrictive covenants.
• Asset sales and carve-outs, reverse due diligence, and one-step vs two-step transactions.
• The sellers’ representations and warranties (R&Ws), a “clean walk” vs indemnities, and representation and warranty insurance (RWI).