Discovering Acquisition Risk; Share A Story

Buying a company and not discovering that a small segment of its manufactured parts were installed on airplanes all over the world and never properly insured by the seller is risky.

The purchase of a union run manufacturing shop where the employees considered the deal so onerous that workers cut the wires on over 20 million dollars worth of electric motors that were being packaged and shipped to the buyer was an unnecessary disaster.

How do smart companies guard against risk?

Share a story or a secret for discovering acquisition risk.

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One thought on “Discovering Acquisition Risk; Share A Story

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  1. Many times over the past 20 years people have come to me having signed a letter of intent and asking me to close the deal. The problem is that the “letter of intent” was actually a legally binding instrument. If you are seriously considering entering into a transaction then put your due diligence team in place early on. It makes no sense to wait. A good team will make the proper inquiries, minimize the risk and properly determine whether you should go forward with the deal and, at what price.

    To be cheap and not have a proper team in place or to wait to bring counsel on board makes no sense. In those situation when I had do work with an existing “letter of intent” it wound up costing the client a significant amount of time and money that he did not otherwise have to spend.

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