Why Bad Deals Happen to Good People - VR Business Sales Blog

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Tuesday, June 12, 2018

Why Bad Deals Happen to Good People

Peter King
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No one ever plans to be involved in a bad deal. Yet all too many entrepreneurs and executives enter into buying a business they later regret. This can be true on an individual buying a family business or a company looking to expand through acquisition. There are generally the same mistakes made over and over; lack of planning; unrealistic timeline to close; understanding and addressing integration post closing; and the worst is when the benefits from purchase or the expected synergies from the purchase just never materialize. In todays deals for a company looking to expand by acquisition, the underlying theme is the goal of synergy.

What is business synergy and how can a buyer be sure to get some? The bottom line premise to synergy is that the whole will be greater than the sum of all the parts. The quest for synergy can be deceptive, especially if there is inadequate communication between the buy and seller. This lack of communication can then lead to misunderstanding as to what the buyer is buying and what the seller is selling. Every acquiring company acknowledges that it wants synergy when completing a deal, but few ever take the time to develop a transactional advisory team, draft a statement laying out the objectives of the deal, or have a plan to solve post closing financial and operational issues.

Just as you trust yourself to operate your business, trust VR and it professionals to lead your transaction team.


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