(Note: Meant for initial understanding, not exhaustive)

evaluating a potential transaction

Buy side transaction

1. For a growth need, you either need to acquire capabilities or you may need to scale up.
2. For acquiring capabilities, you get to know of target companies and those are then evaluated.
3. Factors of evaluation:
   1. Financial analysis
   2. getting an estimate of the value that you are willing to pay
   3. drawing out the synergies that you would get out of the transaction
   4. visualising what the combined entity would look like

Sell side transaction

1. You identify a business in the portfolio which is not performing at par with other businesses and then you make a call if it needs to stay or go.
2. If it is decided that it needs to be let go off, it becomes a sell side transaction.
3. Then you look at investment bankers and intermediaries who would put you in touch with potential investors who would be willing to buy an asset like this.

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STAGES DURING A LIVE TRANSACTION

1. Valuation stage:
   Financial analysis and valuation of a company to help a potential investor arrive at the right number.
   
2. Due diligence stage:
   To make sure that :
   1. all assumptions in your valuation match up with historical trends
   2. there are no legal or regulatory red flags
   3. the companies books, contracts etc are in order.
   4. A change in the company should not trigger the value or transaction as a whole.
      
3. Documentation stage:
   Getting documents in order that contain commercial terms, compliances which are legal and regulatory.