Why Deals Don’t Close

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Directors have it doubly hard when it comes to acquisitions.

They have to hire someone that knows how to find appropriate candidates and execute transactions successfully (this person needs a combination of very specific talents – often misrepresented in resumes) and the board must be clear about the criteria necessary in the search (the difference between needs and wants).

Talking with M & A lawyers, you will find that about 50% of deals don’t make it to closing. There are just so many things that can go wrong and it is so costly when it happens. Continue reading “Why Deals Don’t Close”

Value Insights

 

 

What We Know That Just jimearlyphotoAin’t So, or


Value Insights

 

 

Unanticipated mundane external factors are most often responsible for dumping our transactions into the 80% that don’t add value category. 

 

Carefully developed evaluation and due diligence models offer the best chance of uncovering the questions that if answered properly, will cause us to avoid the failures that affect the great majority of acquiring companies.

 

To have great evaluation and due diligence models without a strong team that can recognize, develop, and work with the tools will drop you short of your goals also.

 

 

The assumptions made in the board room about the talents, team members, roles, responsibilities, systems, and procedures, determines the accuracy of the search and the effectiveness of the due diligence. 

 

A smart team with the right resources can execute the complex task of acquisition at a far lower risk factor than a half smart team with almost the right resources.  The losses can be staggering.  The investments in team and resources are quite modest in comparison.

 

 

Have something to add? 
Got a different point of view, want to play devil’s advocate, or just think we’re all wet? Post your experiences or examples.

 

Brought to you by;                                         www.packardacquisitions.com

Practical Advice

Now is not the time to be recommending selling to your client.  Finance is tight and buyers are being brought deals that they could not have found with great effort a short time ago.  Values are suffering.  Selling is hard.

Could it be a good time to reevaluate growth through acquisition (even to firms more intent on internal growth or even exit planning?).

Here’s why it might be:

Strong players can make deals that will not be possible in strong markets.  Transactions must be made with the finance and terms that are available.  Money is tight and owner finance is far more common today than it was two years ago.

Growing companies prior to exit is a pragmatic approach to growing value, especially if the growth is low risk.

Many smaller and undercapitalized firms will accept buyouts on asset based agreements to procure some upside for their business rather than struggle through an unpredictable next year/s and risk losing everything.

Here’s how:

Build a smart team,

Create a smart plan from start to finish:

*determine precisely what fits–weighted averages criteria model

*plan for transition and monitoring of all aspects of transaction integration

Build a big list,

Contact everyone with a basic friendly invitation to talk

Manage and track information (use modern tools for data tracking)

Monitor progress and make adjustments    

Have something to add? 
Got a different point of view, want to play devil’s advocate, or just think we’re all wet? Post your experiences or examples. Brought to you by;                                         www.packardacquisitions.com

 

 
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