When to Walk Away from an M&A Deal

Not all deals that you enter will be successful. That being said, it is important to understand when is a good time to walk away from an M&A deal, rather than wasting more time and energy on something that is bound for failure.

Do you get along with the seller? This might seem like a menial part of an M&A deal, but when are spending a majority of your time with the seller and their business, being able to work well with them is important. If you love a business deal but cannot stand the seller, walk away.

If the seller is looking for a price higher than the valuation of the company, do not try to compensate with the potential value. You purchasing a business at face-value, not how much growth potential that it possesses under the right circumstances. If the asking price is too far from the range that you are willing to pay, walk away.

Deals may look attractive from the outside, but that is because the seller is marketing to you. They aren’t going to show off their debts and declining sales to lure you in. Utilize due diligence to search for any of these hidden issues. You may uncover some unpleasant things about your target. Unless these problems are easily fixed or overlooked, walk away.

While walking away from a deal is not ideal, sometimes it is necessary to save you from wasted effort and cash. When looking to buy a business, trust the professionals. At George & Company, we have completed countless business transactions and gear our clients towards their best possible option. Contact us today.