M&A Process: What Actually Happens From Mandate to Close
11 min read
- A sell-side M&A process has 11 distinct steps spanning 4-6 months from mandate to close
- Key documents include the teaser, CIM, IOI, and SPA — know the purpose and timing of each
- Structure your interview answer in three phases: Preparation, Marketing, and Execution
- The most tested distinction: IOIs are non-binding with a range; final bids are binding with a specific price
The Sell-Side Process in 11 Steps
A sell-side M&A process typically takes 4-6 months. Here is what happens at each stage:
Key Documents
| Document | Purpose | Prepared By |
|---|---|---|
| Teaser | Anonymous one-pager with key metrics to gauge buyer interest | Sell-side bank |
| CIM | 50-100 page marketing document with company overview, financials, and investment highlights | Sell-side bank |
| IOI | Non-binding preliminary offer with a valuation range | Buyer |
| SPA | Binding legal contract defining all deal terms | Legal counsel (both sides) |
| Fairness Opinion | Independent assessment that the price is fair to shareholders | Independent bank/advisor |
How Interviewers Test This
The most common question: "Walk me through a sell-side M&A process."
Follow-up: "What is the difference between an IOI and a final bid?" An IOI is non-binding with a range; a final bid is binding with a specific price and marked-up SPA.
The Sponsor Dynamic — How Banks Actually Work With PE Firms
The textbook M&A process above covers sell-side advisory. But a growing share of deal flow involves PE sponsors, and that dynamic is worth understanding — especially if you are targeting LevFin or sponsor coverage roles.
When a PE firm acquires a company, it typically needs committed financing from banks. The reality of how this works is far more adversarial than the textbook suggests. Sponsors can and do demand extremely aggressive timelines — $800M of committed financing in a week is not unheard of. Banks frequently underwrite loose documentation terms because they assume the sponsor will fix terms in the market at no cost to the banks, even outside their flex provisions.
Credit investors on the other end have limited ability to push back on terms — if they protest too much, they simply do not get allocated on the transaction. LBO documentation terms have become incredibly loose, and the game is heavily skewed toward PE firms.
Capital markets roles at PE firms have proliferated significantly over the past five years, reflecting how central financing execution has become to the deal process. If you are interested in LevFin or capital markets, understanding this sponsor dynamic — not just the sell-side process — is what separates informed candidates from textbook ones.
Take Your Preparation Further
Download our free M&A Process Cheat Sheet for the complete process, key documents table, and interview Q&As. For a hands-on merger model, see the Merger Model Template.
Ready for personalised feedback? Book a 1-on-1 mentoring session with an experienced IB/PE professional.