Common Factors Leading to M&A Failures

M&A Mistakes (and How to Avoid Them) 1️⃣ Rushed Closing Pushing to close deals in unrealistic timeframes leads to costly post-closing problems. How to Avoid: ↳ Follow all five M&A phases—each serves a crucial purpose. ↳ Involve legal counsel early to uncover hidden risks before closing. 2️⃣ Skipping Due Diligence Bypassing thorough investigation leaves dangerous blind spots in the transaction. How to Avoid: ↳ Conduct a full review of financial, legal, and operational matters. ↳ Allocate enough time for due diligence before finalizing terms. 3️⃣ Misusing MOUs Treating preliminary documents as binding agreements creates contractual confusion. How to Avoid: ↳ Use MOUs strictly for preliminary discussions, not commitments. ↳ Ensure formal agreements follow any letter of intent. 4️⃣ DIY Legal Work Handling complex M&A negotiations without expertise exposes major risks. How to Avoid: ↳ Engage M&A experts who understand industry-specific laws. ↳ Follow the "5-50 rule"—pay $5 now or $50 later. 5️⃣ Overlooking Required Permissions Missing key third-party approvals can delay or derail transactions. How to Avoid: ↳ Identify all required consents early in the process. ↳ Build buffers for landlord, vendor, and regulatory approvals. 6️⃣ Undefined Liabilities Failing to address pre-closing obligations can cause post-sale disputes. How to Avoid: ↳ Clearly define responsibility for pre-closing issues. ↳ Address known risks directly in purchase agreements. 7️⃣ Permit & License Oversights Assuming licenses and accreditations are easily transferable. How to Avoid: ↳ Research transferability requirements well in advance. ↳ Start regulatory transitions early to prevent delays. 8️⃣ Misaligned Post-Closing Expectations Neglecting to define post-closing roles and responsibilities. How to Avoid: ↳ Document specific post-closing obligations in agreements. ↳ Establish clear communication for post-closing matters. Successful M&A transactions require careful planning, due diligence, and expert guidance. Avoiding these mistakes ensures a smoother deal, stronger valuation, and fewer post-closing complications. Approach each transaction with precision, strategy, and the right advisors to maximize success. Found this helpful? Follow Kay Azmat for more insights!

5 things that can turn a winning deal into a losing deal: I've worked on hundreds of M&A deals. These consistently spoil the IRR that investors have modeled out: 1) Founder stops caring Being a founder is exhausting. When they exit for a life-changing amount, they might check out, no matter how good the incentives are. They're not bad people - they're just tired and ready to move on. 2) Customers were based on relationships Those "consistent, healthy renewals" you saw in the financials was actually due to the previous owners potentially making campaign contributions to the govt officials, getting business from family members or their college buddies, etc. When owners leave, the contracts go to the next highest bidder since the relationship is no longer there to sustain it. 3) Company culture mismatch Roll-up investors love the idea of finding "efficiencies" between companies. Makes sense on the spreadsheet. Just remember there are real people behind the redundancies you find and the teams you merge. 4) Blindsided by new regulations Everything can look great - but then some new legislation is enacted that substantially increases the target company's cost of doing business. Very common in emerging markets and highly regulated industries (i.e. infra, energy, mining, fintech, etc). 5) Key person risk Founders aside, sometimes the person keeping the trains running on time is an under-appreciated engineer who feels resentful they didn't get upside on the deal - and becomes a flight risk. The biggest risks to your deal are often outside the spreadsheet. #privateequity #duedilligence #mergersandaquisitions #riskassessment

Selling your business isn’t just hard—it’s statistically stacked against you. Studies show that 70-90% of M&A deals don’t achieve the expected value. 𝘞𝘩𝘺? Because many collapse under the weight of preventable mistakes. Here are 5 key factors behind this alarming statistic: 1️⃣ 𝐎𝐯𝐞𝐫𝐯𝐚𝐥𝐮𝐢𝐧𝐠 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬. Emotional attachment doesn’t equal market value. Buyers only care about numbers they can validate. 2️⃣ 𝐋𝐨𝐨𝐬𝐞 𝐜𝐨𝐧𝐭𝐫𝐚𝐜𝐭𝐬 𝐚𝐧𝐝 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬: Buyers are risk-averse. If your business isn’t buttoned up, expect delays and price adjustments—or no deal at all. 3️⃣ 𝐅𝐚𝐢𝐥𝐮𝐫𝐞 𝐭𝐨 𝐩𝐫𝐞𝐩𝐚𝐫𝐞 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐫𝐢𝐠𝐨𝐫 𝐨𝐟 𝐭𝐡𝐞 𝐩𝐫𝐨𝐜𝐞𝐬𝐬: Due diligence can be 𝘣𝘳𝘶𝘵𝘢𝘭, and many business owners aren’t ready for the scrutiny. 4️⃣ 𝐋𝐚𝐜𝐤 𝐨𝐟 𝐚𝐥𝐢𝐠𝐧𝐦𝐞𝐧𝐭: Misaligned goals and unclear expectations lead to post-deal problems. 5️⃣ 𝐈𝐧𝐚𝐝𝐞𝐪𝐮𝐚𝐭𝐞 𝐚𝐝𝐯𝐢𝐬𝐨𝐫𝐬: The wrong team won’t just fail to protect your interests—they’ll cost you the deal. 𝐓𝐡𝐞 𝐠𝐨𝐨𝐝 𝐧𝐞𝐰𝐬? Your odds of M&A success skyrocket when you’re prepared and address these avoidable pitfalls in advance. Like this post? Explore a wealth of M&A insights on our website—link in the comments. #mergers #acquisitions #founders