However long you think your deal will take, it will take longer. Sorry it’s just a fact – rarely do things complete on time.
Of course the whole process is a stressful one, be you the buyer or the vendor. The problem is there are so many people involved in a transaction, the parties, the lawyers, (and there can be lots of them) the CF team, the funders, the due diligence players, the external shareholders and the accountants, and that’s without the people at home waiting for it all to happen by their husbands, wives, children or whatever!
This number of people and their varying needs and availability and other demands protract all deals, even the best of them.
What happens is that one or the other of the parties frankly starts to “lose the will to live“ and will then start to consider doing a deal at any cost.
Note I say cost, cost is not just related to price, it could be any term. My experience is deals start to fail not because of price which, though important, is rarely a deal breaker.
No, rather it’s the terms that cause buyers and sellers to sometimes act completely out of character, and sometimes inconsistently and frankly without real commercial action to either progress the deal or abort it.
A recent deal of £9m was nearly scuppered by the vendor because of a car allowance, the figure in question being less than £6,000!
On the other side of the table, a buyer so keen to get the deal they upped the consideration without validity as the clever CF adviser tabled a “phantom buyer” with ready cash.
So what should you do to avoid doing the deal you shouldn’t have got into in the first place?
Take a small A5 piece of paper; write on it the 6 critical points that are non-negotiable, keep it to hand and don’t divert.
Jo Haigh is a partner at FDS Corporate Finance and author of ‘The Keys to the Boardroom, How to get There, How to Stay There’, which is released in January.
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