The BishopKnight Group LLC.

Why Some Deals Do Not Close

While the Mergers and Acquisitions market is thriving, not all deals are successful. Understanding the reasons behind failed transactions is crucial. Factors such as the company's value drivers, liabilities, operating environment, buyer and seller perception can all play a role.


The value of a company is determined by various factors such as revenue, gross profit, and EBITDA. A slow growth rate or weak margins can cause buyers to lose interest. Additionally, outstanding liabilities and misrepresentations by the seller can also impact a deal's viability.


The operating environment, including regulatory and administrative factors, can also impact the value of a company. Buyers' perceptions and premiums, as well as the seller's presentation and communication, are also crucial elements. Buyers seek stable, growing companies with competent employees, and companies with solid future prospects.


Sellers must present a clear and convincing summary of their services and financial performance. They must also disclose all liabilities and provide timely follow-up data to maintain momentum in the transaction.


With proper care and consideration, most deals can close successfully, and both parties can unlock the maximum value of their companies through mergers, acquisitions, and divestitures.