Want to draft an acquisition proposal for a company you are looking to acquire? Before you become an owner of this new company, you need to write and submit an acquisition proposal for the target company.
Now you might or might not know what consists of an acquisition proposal letter. It involves business related written documents, transactions, identification of companies involved, and more.
To help you with creating a formal and professional acquisition proposal letter, we bring you ready-to-use proposal template in which you just need to tweak a bit as per your requirement.
It covers all the important documents in order. Just download and use it the way you want.
Acquisition Proposal Template:
1) Introduction for Memorandum of Agreement:
Start with signing a MOA document. It is a formal document stating the involvement of two different companies or entities wishing to work together. In this case, acquiring the business or buying business of another company through asset purchase. Mention your company’s name and the target company’s name in the document. Having a MOA means to have a written understanding of the agreement between two separate companies.
2) Formation of Acquired Entities:
Moving forward, include the document of formation of acquired entities. Your company will clearly state the acquisition of the assets, tangible and intangible owned by the target company. It is a formal document needed to complete the acquisition process. Both the parties should agree to the terms of the things that would be acquired by the partner company.
3) Purchase and Sale of the Acquired Entities:
Now, you should talk about the purchase and the amount involved in acquiring the company. The acquirer mentions the purchase price payment to the seller. Also, mention the date of making a purchase.
4) Principal Contacts for Acquisition Proposal:
Mention the details of your and the target company. Details may include contact name, designation, address, phone number. The details may change and can be updated.
5) Roles and Responsibilities of Partners for Acquisition Proposal:
Use this slide to mention the roles and responsibilities of both the acquirer and acquiree.
6) Due Diligence Review of the Acquired Entities:
You must conduct a due diligence process as an acquirer. It is a process where you examine the business in detail. Again, you would need a formal document to conduct this process. It clearly mentions that the acquiree should let you examine the financial, accounting and business records of the company. Acquirer may ask for contracts and other legal documents to complete the due diligence process.
7) Purchase Agreement in Acquisition Proposal:
After a proper due diligence, you seek to make a final purchase. The content of the agreement may vary. You can include the asset purchase or stock purchase depending on the legal structure of your agreement.
8) Employee Agreement in Acquisition Proposal:
Along with the purchase agreement, both the parties would enter employment agreements. Terms and conditions such as base and incentive compensation can be negotiated before the agreement.
9) Public Announcements in Acquisition Proposal:
Both the parties mutually decide the public announcement of the acquisition. Add the formal document stating when the acquirer wishes to make the public announcement of the acquisition.
10) Exclusive Negotiating Rights in Acquisition Proposal:
You have come to a point of negotiation. It allows both the parties to set their own terms. They can settle and negotiate these terms. Negotiating period may extend until they reach zone of possible agreement (ZOPA). This slide has mentioned all the terms and conditions set by both the acquiree and acquirer. The negotiation period is also stated in the slide. You may edit the content as per your need.
11) Dispute Resolution for Memorandum of Agreement:
Add dispute agreement in the proposal. To avoid any feud, both the parties must sign dispute resolution. It states that both the parties must first resolve the conflict peacefully in case of any dispute.
12) Entirety for Acquisition Proposal:
You can showcase what all is included in this acquisition proposal. Let’s just say it contains documents related to the business acquisition, MOA, employee agreement, purchase agreement, etc.
13) Next Steps:
Lastly, you and your partner can come to an agreement of working together, mutually agreeing all the terms and conditions and hereby sign the agreement.
Congratulations, you have completed the prime step of acquiring the business. No need to juggle around in creating an acquisition proposal from scratch.
Get access to this professionally designed acquisition proposal for your next business.