Let’s Get Real—Really!
The disagreements aren’t always about price. The stars can align around valuation and bid, only to be followed by a disconnect about how the seller will be paid. Firms like those described in the preceding paragraph often are sold as tuck-ins, a type of deal in which payout to the seller comes from the future performance of the accounts being acquired by the buyer. Sellers who won’t accept the notion of contingent payments can frustrate all parties to the deal with their insistence on cash up front.
In my experience, when differences about selling price and deal structure come up in M&A negotiations, they typically aren’t small. They can be reconciled, but doing that requires flexibility and seriousness on both sides. In M&As, learning through mistakes benefits nobody if the wisdom comes only after the deal has died. It's always better to grasp the opportunity with a clear-eyed understanding of the facts going in.
About New Direction Partners
New Direction Partners (NDP) is the print and graphic communications industry’s leading provider of advisory services for firms seeking growth and opportunity through mergers and acquisitions. NDP assists its clients by giving them expert guidance and peace of mind at every stage of the process of buying or selling a printing company. Services include representing selling shareholders; acquisition searches; valuation; capital formation and financing; and strategic planning. NDP’s partners have participated in more than 300 mergers and acquisitions since 1979. Collectively they possess over 200 years of industry experience with transactions in aggregate exceeding $2 billion.
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