Preparing to sell your business is a massive undertaking that demands significant time and effort. So when M&A deals fail, picking up the pieces and starting over can feel daunting, whether or not you intend to put your company back on the market. Whether your deal fell apart early in the process or just before closing, it’s time to roll up your sleeves and identify a solution.
Take a critical look at your business—and yourself
Deals that fall apart fall into one of two categories:
If you can’t take a long, hard look at your own role in the deal’s failure, then your next M&A deal is also at risk.
Consider buyer factors
A major component of any successful deal is finding the right buyer, and ensuring they are well qualified. How much research did you do on the buyer? Did you develop a profile of your ideal buyer early on? What have you learned about the process of recruiting the right buyer that you can apply to your next attempt at selling your business?
Get help to do it right next time
Taking a do-it-yourself approach to mergers and acquisitions is one of the leading reasons deals fall apart. Owners cannot realistically devote themselves fully to a deal while also running a business. And even if they could, they lack the experience and expertise that an M&A advisor brings to the table. Most buyers work with expert advisors, so DIY sales are inherently unequal and slanted toward the buyer.
Level the playing field. Hire an M&A firm you can trust to do it right next time. And if you did work with an M&A firm, consider how well they protected your interests, and whether it might be time to give someone else a go.
Develop a new plan
A haphazard approach is not going to work when you’ve already had one transaction fall apart. You need a set of goals and benchmarks for success before you return to the M&A market or the negotiating table. Without this information, you won’t know whether you're succeeding until it’s too late. If you're working with an M&A firm or investment bank, they should be able to give you a comprehensive overview of their plant to help you succeed next time, their marketing strategy, and how they intend to vet buyers.
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