Companies losing money due to poorly chosen acquisition targets outweigh those profiting from such transactions by large measures.
They can be seen cobbling together broker driven deals nursed & prodded to closing over the objections of their advisors (who still have to be paid when the deal falls apart or implodes later).
35 years of interesting conversations around “bad deals”, with attorneys and accountants unable to overcome the egos, passion, and bull headed entrepreneurs & management teams certain they could correct minor problems (misinformation, culture / technology clash, fraud, etc).
A terrible transaction done once becomes no deal again ever for many companies, closing the door on a very effective path to profitable growth when done wisely and well.
Like the cat that sat on a hot stove; never again will it sit on a hot stove (or a cold stove).
Firms are often willing to commit millions to questionable transactions but little or nothing to the tools, process, & talent that lower risk & make the process more predictable & measurable.
Watch the pros, like Warren Buffet; find a significant pool of candidates, have the people and process in place to act wisely and well, & be as methodical and measurable as possible.
Warren is right about where to look for target acquisitions when he says “don’t ask your barber if you need a haircut”.