Merger and acquisition transactions are complex. Many successful companies and entrepreneurs underestimate the complexities involved in closing such transactions. Therefore, it is good to keep goals in mind and with the right perspective.
Many buyers tend to underestimate the time required to successfully close a transaction. First, it takes a significant amount of time to find the right target company. Then buyers need to spend time to woo and then wed the target.
Moreover, if outside financing is required, buyers need to present everything to banks, and that could be time consuming. If real estate is involved, then an additional cast of characters will be in play. These include real estate appraisers, engineers, and surveyors who may not share the sense of urgency.
Finally, not all advisers will be quick to respond, for example, an adviser for sellers, if he senses that the deal will cause him to lose a client, will have no problem finding compelling reasons why the deal just isn’t right.
Buyers should keep goals in mind and stick to the plan. If a specific step drags on, it’s better to close later than to take short-cuts on due diligence. For the same reason, if the economics have changed, either because of performance issues from sellers or the capital, buyers should stop and make sure that the deal makes sense and is worth closing for.
Lei Jiang Law Firm provides quality Merger and Acquisition legal service to clients. From more information, please contact us.