Topic 80
Negotiation: When Do You Proceed?
Topic 80 provides some guidance for buyers and sellers as you reach the point of full commitment to proceeding with a deal.
FOR BUYERS
- When you are confident that:
- You can manage the risks you have agreed (among your team) to assume in the deal; market, competitive, regulatory, contingent liability, and so on (see Topic 10) …
- You have thoroughly thought out the integration and synergy extraction plan and have a team that can execute and realize the attractive returns expected …
- You feel good about your judgment of the quality, character, and capability of the management team you are buying with the target …
- You have made a proper integrated assessment of market attractiveness, criteria fit, and overlap fit …
- You have made a thorough due diligence effort …
- You have not been overly rushed in the process, resulting in errors in judgment …
- You have a fair price and postclosing indemnification structure that will yield a reasonable return on equity and provide fair protection against preclosing breaches by sellers …
- You do not have a significant question or issue that has not been addressed …
- Then go for it!
- As a general rule, a good deal will be seen as a good deal fairly quickly in the discovery and investigative process. If your learning process keeps hitting “green lights” early on in the discovery effort and the facts support what you are being told about the goodness of this deal, it probably is a good deal.
FOR SELLERS
- For sellers, ...
