[Nicolas Clement]

After conducting the strategic research, evaluating and ranking targets, chosing the right one, conducting deeper strategic, cultural fit and financial projections, and deciding on the proper price range to acquire the target after conducting professional due diligence, negotiation excellence has the highest possible ROI in making sure the acquisition is a success. Your thoughts?

[Judith Ghitea]

Hi Nicolas, I think I partially agree with you. Negotiating the various facets of a deal is indeed vital to the success of an acquisition. Price, closing timeline, leadership positions and titles, so many things to negotiate! My struggle is that the definition of success varies by person and organization. Is actually closing the deal and knowing we’re paying just enough but not too much really success? While leading integration post-close, I need the negotiated terms to be operationally reasonable. Our execs can negotiate a great asset purchase deal with a small closing cash consideration and 2-year earnout but if they agreed to 10-day payment terms when our normal turnaround time for commissions is 45 days, our finance organization is going to suffer for the next 6 quarters. Yes, the numbers are great, but I wouldn’t consider that a success. I’ve experienced several of these on paper successes leading to operational pain over the past few years. We always give the feedback but sometimes the negotiator just doesn’t care what happens as long as the deal is done…and that’s unfortunate.

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