1. Covid has made it harder in my opinion to close on cross border deals as it is very unproductive to travel to the target’s country for due diligence and negotiations. Negotiations over zoom are no replacement for face to face negotiations
Failure of effective human capital due diligence – among the top 5 if not the #1 reason for deal failure in the 1-3 year period post-transaction close. Of course, Human Capital Due Diligence has numerous steps and components, any one or combination can be a cause, so likely more than one of the top 5 and absolutely more than 2 of the top 10 issues are directly attributable to Human Capital Due Diligence.
Overestimating deal synergies has to be among one of the biggest issues in today’s market. With capital at cheap rates and COVID driving innovation, small companies can command a premium on based on prior deal multiples of similar companies.
I think it’s been aptly pointed out already, but I would echo a couple of points:
1) over estimation of available and expected synergies
2) Erosion of value and value creation due to cultural differences
3) Poor due diligence, particularly in the human capital components
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