{"id":295,"date":"2013-10-02T10:00:43","date_gmt":"2013-10-02T10:00:43","guid":{"rendered":"http:\/\/rocksolidbizdevelopment.com\/ourblog\/?p=295"},"modified":"2025-07-01T17:20:24","modified_gmt":"2025-07-01T17:20:24","slug":"time-kills-deals","status":"publish","type":"post","link":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/time-kills-deals\/","title":{"rendered":"“Time kills deals.”"},"content":{"rendered":"

\u201cThe longer it takes to close a deal, the less likely it is to happen; time kills deals.\u201d
\n– Marisa Pensa<\/em><\/p>\n

During the \u201cGreat Recession,\u201d a lot of merger and acquisition work came to a screeching halt, particularly where small businesses were concerned.\u00a0 In an uncertain business climate, buyers stopped buying, and sellers, fearful that they wouldn\u2019t be able to get a reasonable price for their business, stopped selling.\u00a0 Now, although the flood gates haven\u2019t exactly opened, some entrepreneurs are peeking out of their bunkers looking for acquisition targets.\u00a0 So now may be a good time to offer a few thoughts about merger and acquisition activities.\u00a0 For more on this, whether you\u2019d be a buyer or a seller (now or in the future), please read below.<\/p>\n

There are all sorts of aspects to M&A work we could talk about, but for now, we\u2019ll limit ourselves to the proposition that \u201ctime kills deals.\u201d<\/p>\n

Most M&A deals never close.\u00a0 There are lots of reasons for that:
\n\u2022\u00a0\u00a0\u00a0 The seller is not motivated to sell or gets cold feet.\u00a0 His or her head says selling is the right thing to do, but the heart says, \u201cNope, this is my baby and I\u2019m not giving it up.\u201d
\n\u2022\u00a0\u00a0\u00a0 The buyer is not motivated to buy or gets cold feet.\u00a0 He or she talks a good game but is in fact just a tire kicker . . . when it comes time to write the check, the buyer decides it\u2019s too risky and backs off.
\n\u2022\u00a0\u00a0\u00a0 Buyer and seller can\u2019t agree on price.\u00a0 The seller has an inflated view of the company\u2019s value, or the buyer is a bottom-feeder who will only buy if it\u2019s a steal.
\n\u2022\u00a0\u00a0\u00a0 Buyer and seller can\u2019t agree on terms.\u00a0 Buyer wants to pay in installments over 20 years, seller wants all cash up front.
\n\u2022\u00a0\u00a0\u00a0 Something turns up during \u201cdue diligence\u201d that blows up the deal.<\/p>\n

There are many other reasons that deals don\u2019t close, but the fact is, most don\u2019t.\u00a0 So here\u2019s the problem: a blown deal is expensive, not only in dollars (lawyers, accountants, other professional fees), but more importantly, in wasted time and effort.\u00a0 Whether you\u2019re a buyer or seller, once the process starts, your focus, and probably that of your management team, is on \u201cthe deal.\u201d\u00a0 Meanwhile, the company is just treading water, and is probably missing opportunities.\u00a0 I know of one seller who danced with a would-be buyer for a full year before the deal was finally declared dead.\u00a0 The seller\u2019s chief regret was that while the dance was going on, the company lost a full year of growth.<\/p>\n

So as we\u2019ve said, time kills deals.\u00a0 The longer the negotiation and due diligence stretch out, the more likely the deal is to fail.\u00a0 Obviously, it would be foolish to rush headlong into a deal without taking time to understand all the ramifications of it, and to make sure that it\u2019s fair for you and all your stakeholders.\u00a0 Naturally, big, complex transactions are likely to take more time than smaller, simpler ones.\u00a0 But there\u2019s taking appropriate time, and there\u2019s taking too much time.\u00a0 Too much time is the killer.<\/p>\n

There\u2019s probably little to be done to increase the number of deals that actually close.\u00a0 But working with your professional advisors . . .<\/p>\n

. . . by the way, you are going to use professional advisers who have extensive M&A experience, right?\u00a0 Not your regular corporate attorney who has no M&A experience or your accountant brother-in-law who does mostly personal taxes, right?\u00a0 OK, just checking. . . .<\/p>\n

. . . so you can\u2019t increase the likelihood that your deal will close, but working with your professional advisers, you can develop strategies that will limit your exposure and ferret out dead deals as early in the process as possible.\u00a0 Do everything you can to vet the other side, to make sure they\u2019re legitimate players and that they are as committed as you are to getting a deal done as expeditiously as possible.\u00a0 Sounds obvious, doesn\u2019t it?\u00a0 Yet the deal I mentioned above that took a year before crashing is not an isolated incident.\u00a0 It happens.<\/p>\n

Time kills deals, so watch it like a hawk and be intolerant of unnecessary delays.<\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cThe longer it takes to close a deal, the less likely it is to happen; time kills deals.\u201d – Marisa Pensa During the \u201cGreat Recession,\u201d a lot of merger and acquisition work came to a screeching halt, particularly where small businesses were concerned.\u00a0 In an uncertain business climate, buyers stopped buying, and sellers, fearful that<\/p>\n

Read More\u2026<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[39,17],"tags":[],"_links":{"self":[{"href":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/wp-json\/wp\/v2\/posts\/295"}],"collection":[{"href":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/wp-json\/wp\/v2\/comments?post=295"}],"version-history":[{"count":2,"href":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/wp-json\/wp\/v2\/posts\/295\/revisions"}],"predecessor-version":[{"id":547,"href":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/wp-json\/wp\/v2\/posts\/295\/revisions\/547"}],"wp:attachment":[{"href":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/wp-json\/wp\/v2\/media?parent=295"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/wp-json\/wp\/v2\/categories?post=295"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rocksolidbizdevelopment.com\/ourblog\/wp-json\/wp\/v2\/tags?post=295"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}