Broker driven and opportunistic deals are appealing and the excitement of the chase builds quickly. Some of the team members have done a few acquisitions, we are smart, successful, and experts in our field, why wouldn’t we be winners at the game of acquisition?
I like making brick paths and walls and feel a great sense of accomplishment when I have completed some small structure with bricks in a home project.
But when I watch a real brick layer complete a commercial project, with what looks like a thousand precisely placed bricks in one afternoon, I am aware of the skill and practice being demonstrated. I do not compete. I’m pretty sure acquisitions involve more complexities and pitfalls than bricklaying.
50% of acquisitions don’t make it to the closing table, and according to Wharton, Harvard, and Deloitte, 60% of acquisitions destroy value. and over 80% don’t add a sustainable competitive edge.
Then there are the giant losses incurred by completing seriously flawed transactions. A recent client was still paying for a bad acquisition ten years later (losses exceeded the purchase price).
It’s allot more fun to complete a deal that took a little longer and see it add value than it is to spend years undoing or making up for an imperfect transaction.
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