The road to a successful business acquisition can be a long and winding one with lots of obstacles along the way.  Once a letter of intent has been signed to memorialize the basic structure and economics of the deal, a potential buyer typically begins a due diligence review or “deep dive” into the target business to get a better understanding of its assets, liabilities, operations, company culture, etc. If all goes well, the contracts are finalized, the deal closes, and the buyer and seller live happily ever after.  The problem is that life isn’t perfect.  In many cases, unexpected issues arise during a buyer’s due diligence review.  In some cases, the problems are easily quantified and addressed through negotiation.  In other cases, the parties disagree over the existence or significance of something uncovered during the due diligence stage, which puts the buyer in the position of either (i) accepting that particular risk, cost, or obligation, or (ii) walking away from the deal.  Walking away after significant time and expense have been invested can be painful, but rest assured the short-term transaction costs are nothing compared to the long-term suffering and catastrophic financial losses that can result from moving forward with an ill-fated acquisition.  Sometimes, the best deal is no deal.  Acquiring a small business is a process and the more disciplined you are in navigating that process in a business-like manner, the more informed your decision-making will be make and the better your chances of success will be.

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