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When a company starts considering a merger, acquisition, or Special Purpose Acquisition Company (SPAC) transaction, the CFO (Chief Financial Officer) plays a central role in the process. These transactions are complex and come with intense scrutiny. Whether you’re pursuing a traditional M&A deal or preparing for a public debut through a SPAC, your financial operations must be airtight. With this in mind, we’re providing you with pointers on how to approach a comprehensive merger and acquisition checklist that will help CFOs understand what’s required to prepare, mitigate risk, and increase deal success.
Why a SPAC or Merger and Acquisition Checklist Is Critical
A SPAC and merger and acquisition checklist helps CFOs manage complex transactions with structure and clarity. These deals move quickly, and the checklist ensures key financial, legal, and operational items are handled in the right order, without delays or surprises.
Solidifying merger and acquisition readiness with a focused checklist will also keep internal teams aligned and support clear communication with advisors, investors, and auditors. For both M&A and SPAC readiness, a well-built checklist turns a high-pressure process into one that’s organized, trackable, and far more manageable.
Understanding the Differences Between Merger and Acquisition and SPAC Readiness
Though they share similarities, M&A and SPAC transactions have distinct expectations. In an M&A transaction, the company may be acquired by a competitor, a private equity firm, or a strategic partner. The focus is often on integration and long-term value.
SPACs, on the other hand, are blank-check companies that go public with the sole purpose of acquiring a private business. If you’re selling your business, the SPAC moves fast and requires immediate readiness to operate as a public company. This means full transparency, detailed financial controls, and robust internal systems from day one.
Organizing and Auditing Historical Financials
Both M&A and SPAC deals begin with a thorough examination of the company’s past. CFOs should lead a thorough review of all historical financial statements.
- Ensure all statements are GAAP-compliant.
- Close any open accounting issues.
- Prepare for at least two to three years of audited financials.
- Address any revenue recognition, lease accounting, or equity complications.
If the company has never undergone an audit, consider bringing in an experienced audit firm early. Do not wait for the transaction to be announced before fixing gaps. Surprises late in the game can reduce valuation or stall the deal, which makes a thorough SPAC checklist all the more crucial.
Strengthening Internal Controls and SOX Compliance
SPAC transactions immediately subject the company to the standards of public companies, including Sarbanes-Oxley (SOX) compliance. M&A buyers (especially public or PE-backed firms) will also look at internal control maturity.
Steps to take now:
- Identify material weaknesses or control gaps.
- Document and test key financial processes.
- Establish segregation of duties, approval workflows, and oversight.
- Engage consultants or advisors with SOX experience if needed.
Even if SOX compliance isn’t required today, being ready for it builds investor confidence and signals strong governance.
Preparing Financial Forecasts and Pro Forma Models
M&A and SPAC investors expect a clear picture of your company’s future. That includes realistic forecasts and defensible growth plans.
As CFO, your job is to:
- Create detailed revenue and expense forecasts, supported by data.
- Build sensitivity models that show upside and downside scenarios.
- Develop pro forma financial statements that accurately reflect the transaction’s impact.
These models are not just internal tools. They will be used by buyers, auditors, underwriters, and investors to assess your business.
Cleaning Up the Cap Table and Equity Records
Your capitalization table must be clean, accurate, and ready for legal review. Even small mistakes can create big headaches in diligence.
Checklist items include:
- Verifying all outstanding equity instruments (stock options, SAFEs, convertible notes, etc.).
- Ensuring documents align with your general ledger and investor agreements.
- Resolving any disputes or missing signatures.
- Working with legal and accounting to prepare disclosure schedules.
In a SPAC transaction, the cap table is often included as part of the S-1 filing. Accuracy is critical.
How a SPAC and Merger and Acquisition Checklist Supports the Diligence Process
M&A and SPAC due diligence is intensive and complicated, making the need for a merger and acquisition due diligence checklist all the more important. CFOs are responsible for coordinating and organizing vast amounts of documentation, including:
- Financial statements and audit reports.
- Tax filings and compliance records.
- Contracts, leases, and legal agreements.
- Payroll records and employee benefits data.
Set up a secure data room early and begin populating it as you go. The more prepared you are, the smoother and faster the process will be.
Assembling the Right Advisory Team
You can’t do this alone. Successful transactions require experienced advisors who know how to guide your company through the finish line.
Build your team early:
- Audit and tax professionals.
- Legal counsel.
- Investment bankers or M&A advisors.
- Internal and external accounting support
Collaborate with individuals who have a deep understanding of your industry and experience in preparing transactions for readiness. A strong team reduces the risk of mistakes and boosts credibility with investors or acquirers.
Communicating with the Board and Internal Teams
Your board and executive team should be kept informed throughout the process. Major transactions often require sensitive handling. This is particularly true if layoffs, restructuring, or new reporting lines are possible.
As CFO, you should:
- Provide regular updates to the board and CEO.
- Translate financial complexities into plain language.
- Prepare leadership for what to expect during diligence and integration.
- Ensure that other departments (HR, IT, and Legal) are aligned and informed.
Transparency helps prevent confusion and builds trust during a stressful time.
Planning for Life After the Transaction
Whether your company and a SPAC are ready to merge or going public via a SPAC, the work doesn’t end once the deal closes. In fact, it often gets more demanding.
Key post-transaction tasks:
- Integrate reporting systems if merging with another company.
- Prepare for investor relations responsibilities.
- Manage new regulatory filings and timelines.
- Monitor employee morale and retention.
Build a transition plan early. The better you plan for life after the deal, the smoother the handoff will be. Additionally, it may be a good strategy to consider hiring merger and acquisition consulting services, as this process can be a potentially complex endeavor.
FAQs on the SPAC or Merger and Acquisition Checklist for Readiness
How should a CFO manage communication with investors during a SPAC or M&A process?
Clear, consistent communication is critical. This is especially true if your company is already engaging with potential investors. While legal counsel should review all external messaging, CFOs should be prepared to speak confidently about the company’s financials, forecasts, and strategic vision. Establishing a unified narrative across executive leadership helps avoid misalignment.
How does the merger and acquisition checklist help identify deal risks before diligence?
A well-structured checklist for merger and acquisition processes helps CFOs surface financial, legal, and operational red flags early. By proactively addressing issues such as outdated contracts, undocumented equity, or weak revenue recognition practices, you reduce the risk of surprises that could delay or jeopardize the deal.
How do earn-outs or contingent payments affect financial planning?
Earn-outs tie part of the deal value to future performance milestones. CFOs should model different scenarios to understand how these terms might impact cash flow, taxes, and long-term forecasting. Misjudging these metrics can create tension with new stakeholders post-close.
When should CFOs start building their merger and acquisition checklist?
Ideally, CFOs should begin building the merger and acquisition checklist 6 to 12 months before pursuing a transaction. This provides sufficient time to close accounting gaps, organize financial records, prepare audit materials, and align internal teams long before outside parties begin their review.
What does a post-transaction finance team need to look like?
After a transaction, your finance team often assumes new responsibilities, such as SEC reporting, investor relations, integration accounting, or compliance functions. Many companies need to expand their team or bring in interim support to keep up with these demands.
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Matt Garrett is the Founder and Chief Executive Officer of TGG. He is a regular speaker across the country on behalf of Vistage educating business owners on the need for sound financial practices, and is Vice President of the Board of Directors of FINACA. Under Matt’s leadership, TGG has received the following recognition: INC. 5000 top companies in the U.S. five years in a row; one of “San Diego’s Fastest Growing Companies” the past four years; and is among San Diego’s “Best Places to Work.”
