Article by Stephen Groves – Director at Quinn M&A
Attention to detail is great. As an accountant by trade, I appreciate how important detail can be. Be it, ensuring you understand the current status of your debtor and creditor ledgers, or making sure your employees are paid correctly.
Through my experience as a transactional advisor however, I’ve witnessed countless examples first hand of good deals destroyed (by both buyers and sellers) through disagreements over small details that are not material to the deal at large.
Other times, I’ve seen prospective acquirers pay their consultants and advisors enormous sums of money to investigate risk factors which will have minute implications to them as part of the transaction and beyond.
The small details in question can be to do with anything from disagreements over transitional arrangements post-transaction to concerns with relation to business record keeping processes or even concerns over the tax implications of a transaction for either party.
Don’t get me wrong – I strongly believe thorough due diligence is an integral part of the transaction process. In fact, a great deal of my advisory work is done in this space. With that said however, the acquisition of a medium-sized business carries risk – normally a higher level of risk than many other mainstream investments. Buyers and sellers should keep this front of mind in all negotiations.
Further, in my experience, it is vital that business buyers and sellers remain strongly focused on their overall goals of the transaction. This will make it easier for both parties to find common ground on potential obstacles in the transaction (there will always be obstacles!) Further, it maximises the chances of buyers and sellers maintaining a good working relationship post-transaction, the value of which cannot be priced.
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If you are seeking a professional advisor to assist you with the merger, acquisition, divestment or valuation of a business with an enterprise value of between $1 million and $50 million please contact Quinn M&A on 02 9223 9166 or email [email protected] to find our nearest office.