>>haltin+Ba
Lots of times the process starts through some mid-level manager expressing interest in a possible m&a, and initiating what I'd call "casual" due diligence, along the lines of what the PP described. The issue here, from the target's pov, is that the person/team sponsoring the research/engagement isn't empowered to execute an acquisition -- ultimately, they're just performing research to build a business case that validates the viability of the purchase, and helps provides insights sufficient to guide the acquiring company's deal team on desirable base contract terms & structures. All this
feels like it's an acquisition moving quickly to small companies that haven't been through it before, but it really isn't. Only after the corporate development analysts & attorneys get involved will it move quickly, but that's primarily for two reasons: 1) the due diligence is already largely completed, and 2) they hold the purse strings.
Note that it's pretty common for years to pass between the first and second stages of this process, and there are any number of reasons why acquisition negotiations can either suddenly accelerate (it becomes competitive, partnering isn't going to work as a fallback, the target is going out of business, the acquiring company needs to unload cash fast, ...) or slow down (partnering becomes more desirable than acquisition, 1st party development becomes competitive, various legal reasons intervene, business strategy shifts away from whatever made the acquisition interesting in the first place, org changes shift the focus away from the acquisition, ...).