by Angus Young
Mergers and acquisitions are often an intricate dance but rarely are both parties moving to the same rhythm. While differing tempos are widely
observed and can be compatible, a significant mismatch often leads to doubt settling in a buyer’s mind, vendors losing interest, market conditions and company performance changing, deal costs mounting – and the deal may no longer make sense.
Time, in this context, is a silent killer of deals.
From the buy-side perspective, delays often erode trust, breed scepticism and increase risk of a transaction being executed:
- Information not being available: A sceptical buyer begins to question the competence of the seller. If a data room isn’t prepared and information is missing, buyers may conclude the seller is unprepared or hiding something.
- Management disorganisation: Disorganisation signals potential deeper issues either in management’s ability to extract value post-close or the overall transparency and validity of the deal.
- Capital drag: Capital commitments are not free. A buyer sitting on unallocated capital for six months sees opportunity costs mounting — often pivoting to alternative opportunities.
- Market shifts: An acquisition strategy may not be relevant if market conditions change, new legislation is introduced, adverse events occur etc.
On the sell-side, delayed processes are equally punishing. Vendors may ultimately decide the distraction and costs outweigh the reward, and the deal may perish:
- Distraction from operations: A drawn-out process is a major distraction for management, pulling focus from daily operations and long-term initiatives. Performance may slip, giving buyers ammunition to renegotiate terms or walk away entirely.
- Strategic growth opportunities: Prolonged periods of deal negotiation may restrict a vendor from pursuing other strategic avenues.
From both perspectives, a delayed transaction timeline increases costs and risk, decreases patience and ultimately may cause a deal to collapse.
Efficient deal teams and disciplined stakeholder engagement are not luxuries—they are value-preservation tools. Deals thrive on momentum, trust, and clarity. It becomes important for an advisor like Chessboard to manage the process efficiently, juggle expectations and timelines from both parties, and often be the “bad guy” needed to keep things moving. We ensure:
- Preparedness: A fully populated data room from day one.
- Clear governance: A tight decision-making process among seller stakeholders to avoid re-trading.
- Disciplined timelines: Weekly milestones for diligence responses, legal drafts, and approvals.
Preparedness and pace are not “nice-to-haves,” they are the difference between closing on favourable terms and watching value evaporate.