Selling The Deal – Auction, Bilateral Or Something Else

Auctions vs bilateral processes

Over the last decade, auctions have become firmly established as the preferred process for sellers to market potential M&A transactions. The process is designed to maintain competitive tension for as long as possible, and also to make participation in the process smooth and easy, for example by providing vendor due diligence (DD) reports in the first phase to enable prospective bidders to jump start their DD processes without incurring the full costs of such an exercise.

The streamlining and standardising of the M&A process to achieve the best possible terms for sellers has reflected the broader dynamics of the market across this time: huge inflows of funds to private equity and cheap financing created high levels of competition amongst buyers, which allowed sellers to achieve record valuations and impose seller-friendly deal terms on buyers, such as highly limited recourse and stringent obligations to ensure that conditions are