Weekly M&A Round Up

14 Lessons from 250 Transactions

250 transactions. That was the milestone that we here at Morrissey Goodale celebrated last week. Two hundred fifty times we’ve been privileged to help our clients—both sell-side and buy-side—successfully close their deals. Each transaction has been unique—with its own special set of circumstances, its own “story” as it were. You can see a full listing of those deals here.

Over the past few days, we took some time as a team to reflect on what we’ve learned from these 250 transactions. And here are 14 lessons that we’d like to share with you.

 
Nick Belitz, Principal
Morrissey Goodale (Denver)


1. A signed LOI with a private equity buyer is not an invitation to a smack-down: Contrary to popular belief, private equity buyers are not looking to get a seller under Letter of Intent (“LOI”) and then mercilessly beat the price down during due diligence. While it is true that the arcane minutiae of accounting rules and the mundanity of revenue recognition can challenge even the best minds among us, virtually all buyers in this industry—private equity-backed or not—are quietly praying the due diligence process goes well and everything checks out. Good buyers know that they’re bringing partners aboard in the combined business, and they want sellers excited and energized about future prospects, not bitterly licking their wounds over a pricing dispute.

2. Recency bias is real: Buyers or sellers in a prospective deal often fixate on whatever happened most recently as long as it supports their preferred view of the world. Sellers see the best-ever year that ended six months ago as the new normal of the great times to come. Buyers see a hiccup in revenue over the last two months as a sign of the Apocalypse. Because of the inherent myopia, neither position tells the full story. Instead, buyers and sellers should focus on the strategic (meaning “long-term”) business case for the combination and the best-available information on market demand and let that be the guide.

 
Brendon Cussio, Principal
Morrissey Goodale (Denver)


3. Price isn’t everything: The best deal isn’t always the highest offered. It’s the combination of both quantitative and qualitative measures: price, structure, cultural and strategic fit, and opportunities for growth of the business and the staff.

4. Don’t forget the gravy: Successful buyers add gravy, value above the purchase price provided via equity incentives for management and key employees, sharing in seller transaction expenses, or assumption of seller liabilities that give them a competitive advantage over their peers.

 
Jon Escobar, Principal
Morrissey Goodale (Chicago)


5. Flexibility wins the day: Deals rarely go exactly as planned. Being flexible and adaptable—whether in deal terms, timelines, or expectations—can often be the difference between a closed deal and a missed opportunity.

6. Know when to walk away: Not every deal is a good deal. Recognizing red flags early and having the discipline to walk away from a deal that isn’t the right fit can save time, money, and resources. It’s better to pass on a deal than to force a bad one.

7. Due diligence is a two-way street: While buyers are expected to conduct thorough due diligence, sellers must also be prepared to vet their potential partners. Understanding a buyer’s track record, financial stability, and post-acquisition plans is crucial for ensuring long-term success and alignment.

 
David Thornhill, Vice President
Morrissey Goodale (New York)


8. Active listening: Keep in mind that the person sitting across from you is often negotiating not only with you, but internally as well. Truly listen to identify what constraints they might be under and work to properly address and minimize elements of risk. Risk is going to be paid for—be creative in minimizing it and placing it where it belongs.

 
Mark Goodale, Managing Principal and Co-Founder
Morrissey Goodale (Boston)


9. Culture eats strategy for breakfast: Forget spreadsheets—if the team chemistry isn’t right, the deal is a mess waiting to happen. Nail the culture fit, and you’re halfway home.

 
Nate Wentworth, Senior Consultant
Morrissey Goodale (Denver)


10.  Clean up your house: Removing personal assets and costs from the business and ensuring that revenue is recognized properly will help alleviate potential hazards of the sales process and increase the likelihood of a smooth and successful process.

 
Lisa Elster, M&A Consultant
Morrissey Goodale (Natick)


11.  Integration begins before the deal closes: Successful integration requires early planning well before the deal is signed. Early involvement of integration teams can ensure a smoother transition, reduce post-deal turbulence, and maximize the value of your investment.

 
Ben Hamer, Consultant
Morrissey Goodale (Boston)


12.  Avoid making assumptions: When negotiating terms, transparent conversations about the other party’s goals can uncover opportunities for small compromises that can lead to greater overall benefits for both sides.

 
Allie Tepper, Principal Advisor
Morrissey Goodale (San Francisco)


13. M&A is not a substitute for succession planning: Buyers, especially financial buyers, want to see a strong and committed management team in place to take the firm forward. By having a robust succession plan, you maximize your options and, therefore, your payout.

 
Katharine Van Leer, M&A Consultant
Morrissey Goodale (Durham, NC)


14.  Steady as she goes: Things can get stormy as “closing” approaches. There’s a lot going on for both the buyer and seller. And this can be really stressful—especially for the seller. Constant communication, asking questions, and patience are key ingredients to getting a deal across the finish line. 

Best Post Transaction Performance Award Update

Applications continue to roll in for the Best Post-Transaction Performance Award as part of our Excellence in Acquisitive Growth Awards Series. 

If you believe that an acquisition you’ve made deserves recognition by the industry, then we invite you to begin the application process by clicking here. Applications are being accepted through Friday, September 13.

The Awards will be presented at the 10^th annual Texas and the South M&A and Business Symposium in Houston this October.

You can contact Mick Morrissey at [email protected] or 508.380.1868.