Deal falling through: Recovering and moving on

by a searcher from Columbia University - Columbia Business School

9 months ago

A deal I had been working on just fell through. After a little over 2 months of diligence, great rapport with the owner and their management team, it became clear that the company (a service business) had inflated margins when compared to its peers. 

I identified some adjustments that needed to be made and brought this up with the seller, who didn't accept.  It was a hard decision, but I couldn't afford to overpay for the company.

Any advice on moving on from a broken deal? I'm a traditional funded searcher and still have about another year.

1 like
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37 comments

searcher from Stockholm School of Economics

I think also finding ways to sharpen your skills beyond deal making will help. Anticipating you will be a CEO and then preparing for that moment is not time wasted.

8 months ago | like reply | 1 like

professional from University of Toronto

It's always frustrating when this happens, ^Searchfunder member‌, but it's part of life in the M&A world and you need to get comfortable with it - it will happen again, probably multiple times, in your acquisition journey. That being said, it seems there's a lesson in this experience about the importance of focused due diligence. Why did it take 2 months of due diligence to uncover "inflated" margins? Financial review would normally uncover this kind of issue early in the game.

9 months ago | like reply | 1 like

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