"Today’s discussion will deal with the emotion inevitably involved in just about any M&A deal.
Starting with the Seller side, which can be a sole proprietorship, partnership, group of investors and multiple levels of shareholders and board members, the process of selling a middle market technology company revolves around taking input and data and using it to deduce a strategic plan of attack, which some call an exit strategy. The more intellect and finesse that is employed in the planning process, the stronger and more impactful the results. Understand - the road ahead in the acquisition process can be fraught with lowball offers, unreasonable demands (not always at the behest of the Buyer), interpretations during Due Diligence from so called experts that lack tremendously in common sense, and contingencies placed deals by financing institutions. There are times that the annoyance builds up to a point where a Seller might take these things personally. This is a mistake.
Logic needs to rule and emotion needs to be checked at the door. In every case it is imperative to step back, take a deep breath and look at the bigger picture. It may not be the perfect picture, but life itself is not perfect and the process of selling a business is no different. In the end if the results are in line with what you expected (or otherwise can live with), but every detail is not as you would have wished, then it makes sense to complete the transaction. Believe me when I tell you the grass is not usually greener on the other side and the next Buyer in line will be substantially similar to the one you are contemplating walking away from. And as the case is with any transaction, both sides must be willing to lose on some points and gain on others – this is the essence of negotiation. No transaction ever results in one party getting everything they want – what’s key is to identify deal breakers in your transaction, and stick to them. All the other emotions and issues that arise during deal making are just noise.
On the Buyers side, the process is even more difficult. You are entering an arena where you will never know what the Seller knows and you will have to employ intellect, expertise and common sense – both you and the professionals whose advice you seek. Buyer deal stressors are similar to seller deal stressors. An action may occur during due diligence that you perceive as negative from the target company or its agents, but this does not change the dynamics of the deal. Buyers too should take a step back and look at the deal as a whole and not as though every detail may be a make or break scenario, or deal killer. We try to keep the parties away from using the words “deal killers” because the reality is that when emotion is involved, anything can be used to kill a deal, no matter how trivial. The point we try to convey is that if the big picture is still solid as you viewed it when you entered into the purchase arrangement, then why waste time obsessing over the
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