Getting to the Finish Line: 5 Ways to Ensure Your M&A Deal Actually Closes

You’ve found a buyer and begun planning for an ownership transition at your company. But then, it all falls apart. It’s a familiar scenario in the world of M&A, with at least 10% of deals failing to make it to closing. Many more face significant delays. Those delays disadvantage owners, destroying momentum and potentially causing the deal to lose value. Fortunately, there’s a lot you can do to increase the odds that your Dallas M&A deal crosses the finish line.

Hire an Investment Banking Firm

Arming yourself with expert knowledge is critical to closing the deal. The right M&A firm anticipates issues before they create a crisis. They can help you prepare for M&A, negotiate on your behalf, and free up time and energy so you can continue overseeing daily operations as the deal edges closer to closing.

Vet Buyers Ahead of Time

Financing is a huge culprit in deal failure. So, ensuring a buyer is well-qualified early on can help you keep overly eager but unqualified buyers out of the running. Each niche has its own challenges, and your investment banking firm should be familiar with the most common in your subsector of the marketplace. Work with them to minimize these issues early on, and to vet buyers to protect against them. For example, in some sectors, buyers panic at the thought of regulatory oversight and become keen to walk away.

Prepare for Due Diligence

Due diligence snags can slow things down, create unnecessary stress, and potentially kill the deal. Your investment banking firm should help you get ready for due diligence early in the process, gathering all the documents you need so you can be responsive to the buyer’s requests. Don’t wait until the last moment. And if you think there might be a due diligence issue, address it with your advisory team early so they can help you prepare.

Know Your Non-Negotiables

Negotiating an M&A deal can be difficult and emotional. It’s easy to get overwhelmed. Don’t allow your emotions to control things. Instead, make a list of your non-negotiables. What is your walkaway price? What are the most important deal terms? Everything else is just window dressing. Don’t allow small deal terms, minor buyer annoyances, and defensiveness about your business to take your eye off of the prize.

Hammer Out Details in a Purchase Agreement

You’ll save yourself significant time and trouble with a well-written purchase agreement. Work with an M&A lawyer to draft a contract that addresses all the major terms. Your purchase agreement should also set a timeline for closing and negotiation so that both parties know what to expect. This can prevent endless delays and disputes over the closing process. Don’t rush through drafting this important document, and do not allow the buyer to demand that you use their boilerplate. Every word of that contract matters, so ask your legal team to go through it with a fine-toothed comb.