The Only M&A Closing Checklist You Need (Pre-Closing, Post-Closing, and More)

If your business is looking forward to a merger and acquisition (M&A), having a comprehensive M&A closing checklist is necessary to ensure a smooth flow of processes.

Such a checklist can serve as a roadmap, guiding you through each step of the process, from pre-closing to the final stages.

In this article, we’ve created a comprehensive M&A closing checklist to get you started.

We understand that M&A is a complex process and can take up all your time and energy. At Exitwise, we can help you hire and manage an expert M&A team so that you land a successful M&A deal without compromising on your true valuation.

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Prepare to Close

You should begin the closing process long before the actual closing date of the M&A deal. It involves meticulous planning, gathering necessary documents, and ensuring all parties are on the same page.

Gathering Necessary Documents and Information

Collecting the proper documents and necessary information is the first step in the M&A process. You must analyze your financial statements, legal documents, operational data, and other aspects.

This step ensures you have essential decision-making data to expedite the M&A process and prevent unnecessary delays.

Pre-Closing Formalities

Check out these 11 pre-closing steps and what each of them involves.

1. Due Diligence Completion

The first step in any M&A closing checklist is the completion of due diligence. Usually, the buyer executes the due diligence. However, you must thoroughly review your company's financial, legal, and operational aspects to prevent any red flags in your business.

Let’s look at what each of these entails:

  • Financial due diligence can include examining the company's financial statements, assets, liabilities, and future projections.

  • Legal due diligence mainly deals with reviewing contracts, legal disputes, and law compliance.

  • Operational due diligence usually focuses on your company's business model, market positioning, and efficiency.

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2. Final Negotiation of Purchase Agreement

The purchase agreement seals the M&A transaction with legally binding paperwork. It generally includes price adjustments, representations and warranties, covenants, and indemnification terms.

  • Price adjustments are usually based on your business's net working capital, debt, or other factors that may impact its valuation. To get an idea, consider checking out our valuation calculator.

  • Representations and warranties cover many issues, including the accuracy of your financial statements, compliance with laws, and undisclosed liabilities.

  • Covenants are promises to do or not do certain things.

  • Indemnification terms provide for compensation to the acquiring party if the representations and warranties prove to be untrue.

Based on these factors, you can negotiate the final terms of your agreement to reach a deal that's acceptable to both you and the purchasing party.

3. Regulatory Approvals

M&A transactions may require regulatory approvals, which include antitrust and competition law compliance, ensuring the deal doesn't create an unfair competitive advantage.

You may also need industry-specific approvals, such as from the Federal Communications Commission for telecom mergers or the Federal Reserve for bank mergers.

4. Third-Party Consents

Third-party consent is unavoidable in M&A transactions to ensure proper collaboration with all parties involved. These consents can include lenders, landlords, and material contracts.

For example, a company may need its landlord's consent to transfer the lease to the buying party.

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5. Financing Arrangements

The financial aspects of an M&A deal can involve debt financing (where the acquiring company borrows money to finance the acquisition) or equity financing (where your company issues new shares).

The financing may be a one-off payment or stage-wise partial compensation, depending on the type of merger both parties agree to.

6. Tax Matters

Tax intricacies play an important role in the outcome of the deal. However, if you involve experts in planning and structuring the tax aspects, you can minimize the tax burden and maximize the benefits of the sale.

Usually, the term sheets are drafted by the buyers, making most of the terms disadvantageous to you. That’s why you should consult with expert tax advisors right from the beginning to restructure the terms before signing the deal. At Exitwise, we help you hire the best tax advisors, investment bankers, and M&A attorneys to maximize the value of your business.

These advisors can also guide you regarding pre-closing restructuring transactions to ensure a smooth deal.

7. Employee and Management Agreements

Employee and management agreements are crucial in determining your company’s structure after the M&A.

The agreement usually includes:

  • Retention plans to keep key employees

  • Employment agreements outlining the terms of employment

  • Termination agreements for employees who will be laid off

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8. Intellectual Property Transfers

In many M&A transactions, intellectual property (IP) is a crucial or sometimes even a primary asset (examples include patents, trademarks, logos, designs, copyrights, etc.).

The deal may involve transferring these rights to the buyer or drafting appropriate licensing agreements where the buyer is licensed to use the IP.

9. Real Estate Matters

Real estate matters can include property transfers or lease assignments.

Reviewing all real estate documents to ensure a smooth property rights transition and avoid any future legal disputes is important.

10. Environmental Matters

Environmental compliance is becoming a mainstream necessity for many companies. Therefore, you should ensure that your company complies with all environmental laws and has all the necessary permits and licenses.

If you’re unsure, contact the relevant authorities to ensure you don’t miss out on important processes.

These compliance checks will help potential buyers assess their liabilities and result in a smoother transaction for you.

11. Insurance

Finally, the M&A closing checklist usually includes reviewing your current insurance coverage for general liability, property, cybersecurity, etc.

Buying companies appreciate transparency in these matters, as they know their risks and liabilities and can formulate new policies or adjustments accordingly.

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Understanding the Closing Process

The closing process in an M&A deal usually involves working with the buyer to achieve the best value from the transaction.

Closing Formalities

Here are nine essential steps involved in the closing process:

1. Execution of Transaction Documents

The closing begins with the execution of transaction documents. These generally include:

  • The purchase agreement, which details the terms of the deal

  • The bill of sale, which reallocates ownership of assets

  • Assignment and assumption agreements, which transfer liabilities and obligations

Once you and the buyer sign and date these documents, they are considered ‘executed.’

2. Release of Escrows and Third-Party Consents

The M&A process usually involves an escrow account- which holds all the paperwork and funds till the terms of the escrow agreement are met. Once the conditions are met, the escrow is released.

Additionally, you would need third-party consent for this step. You may require consent from lenders, landlords, or other parties with a stake in the transferred assets to transfer documents.

3. Regulatory Filings

You may want to add certain post-closing regulatory notifications, such as the transfer of additional assets, future obligations of both parties and more. These clauses are common and can be easily integrated into your agreement with the help of an M&A expert on your side.

Additionally, you should submit the compliance filings required by law. These can include filings with the Securities and Exchange Commission, the Federal Trade Commission, and various other regulatory bodies to ensure compliance.

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4. Internal and External Communications

Another critical step in the closing process is internal and external communication, where you inform your employees, customers, suppliers, and the public about the merger and acquisition.

You can communicate about the M&A through employee notifications, press releases, and company website updates so all stakeholders stay informed about the change.

5. Operational Transitions

Operational transitions are an integral part of the closing process.

These usually include:

  • IT system integrations

  • Operational handover of departments and functions

  • Accounting system upgrades

And more.

6. Post-Closing Adjustments

You can make post-closing adjustments to the business if both parties think they’re necessary.

These can include:

  • Working capital adjustments (which ensure the company has sufficient funds to continue operations)

  • Earn-out arrangements (which are additional payments you may receive if the company meets specific performance targets)

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7. Integration Plan Execution

This step involves implementing the strategic plan for integrating the two companies.

It can involve:

  • Merging operations

  • Consolidating offices

  • Integrating culture and systems

  • And other tasks for coherence.

8. Post-Closing Obligations

Post-closing obligations can include:

  • Indemnification claims process (which protects the buyer from losses due to breaches of the purchase agreement)

  • Dispute resolution mechanisms (which provide a way to resolve disagreements that arise after closing)

9. Final Legal and Compliance Checks

The final step in closing usually involves obtaining conclusive legal opinions from M&A lawyers and completing compliance certifications.

These ensure that you meet all legal requirements and that the company follows the applicable laws and regulations.

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After Closing

The closing of an M&A deal is not the end of the process. After closing, you must take some essential steps to ensure a successful transition.

Consider looking at a few of our M&A success stories to learn from other successful exits.

Here are three crucial considerations in the post-closing phase:

1. Immediate Actions to Take After Signing

Once the deal is signed, these are some immediate actions that you need to take:

  • Transfer Essential Assets: You must transfer your essential assets, like computer access codes, alarm codes, instruction manuals, etc., to the buyer.

  • Transfer Customer Lists: This action is crucial to ensure that your existing customers get the same support without any break in service.

  • Transfer Vendor Accounts: You should transfer your vendor and other third-party accounts to the buyer to ensure continuity in business dealings.

2. Post-Closing Obligations

The most crucial obligation in M&A is integrating the two companies' operations, culture, and systems. It involves merging business processes, aligning corporate cultures, training employees, and integrating IT/physical systems.

Both parties must ensure careful planning and execution to minimize disruption and maximize synergies.

Close-up of hands working on laptop next to financial documents and calculator.

3. Ensuring a Smooth Transition

Ensuring a smooth transition is highly critical for the success of an M&A deal. You can do this by regularly updating all stakeholders about the progress and changes to business operations to help alleviate concerns and build trust.

Since employees make or break a company, supporting employees during the transition is crucial. Some support steps include:

  • Training for new systems or processes

  • Counseling services

  • Clear communication about changes to roles or responsibilities

A well-executed employee support program can help maintain morale and productivity during and after the transition.

Apart from the above considerations, another important step is working to retain customers and maintain customer service levels during the transition. This involves communicating with customers about the merger/acquisition, ensuring service levels are maintained post-merger, and promptly addressing customer concerns.


Mergers and acquisitions are complex processes and need careful planning and execution.

Remember, every M&A deal is unique, and you must adapt this checklist to fit your deal's specific needs and circumstances. Consult with legal and financial advisors to handle all agreement aspects adequately.

If you are looking for the right experts to facilitate your M&A deal, Exitwise will help you find and build your dream M&A team. All you have to do is connect with us, and we’ll take care of the rest.

Brian Dukes.
Brian Dukes

Brian graduated from Michigan Technological University with a BS in Mechanical Engineering and as Captain of the Men's Basketball Team. After a four-year stint at Deloitte Consulting, Brian returned to school to get his MBA at the University of Michigan. Brian went on to join his first startup, a Ford Motor Company Joint Venture, and cofound a technology and digital marketing services agency. Through those experiences, Brian embraced the opportunity to provide M&A education and support to his fellow business owners as they navigated their own entrepreneurial journeys.

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