Paul Share: Five common mistakes to avoid when buying a company – Buyouts
Paul Share was published in Buyouts with his article titled “Five common mistakes to avoid when buying a company.”
- Synergies may be hard to achieve
- Sometimes buying isn’t the best option
- Proceed with caution when you hire an investment banker
I’ve spent 15 years working with distressed companies, so I’ve seen just about everything. From executives who commit fraud but are somehow able to look you in the eye and claim they didn’t, to bankers persuading their clients to pay more to close a deal, to physical fights breaking out between owners in front of me due to stress.
I’ve seen private equity portfolio companies go from the brink of bankruptcy to recover and earn $400 million or a 10 times return on the original investment that was almost wiped out. Yes, I’ve seen this.
Business is a full-contact sport. Most executives charge in to problems but, just as in football, the best athletes are the ones who realize that the hole they see may not be open when they get there. They are ready to react accordingly. Relying on plans made before an acquisition begins may doom an investment as soon as it starts. On the other hand, having a dedicated team, including insiders and outsiders whose sole job is to focus on the daily issues and play devil’s advocate, can save owners money, years of pain and possibly their business.