Hey everyone,
As I continue my IB education, I came across this article and felt I would share it and ask a few questions about it.
The main reasons for failure that this post goes into detail about are;
1) SELLERS: YOUR BUSINESS IS NOT WORTH WHAT YOU THINK
2) BUYERS: THE RATIONAL PRICING THEORY HOLDS TRUE IN THE MIDDLE MARKET
3) DEATH IS INEVITABLE
4) TO ASSUME IS TO MAKE AN ___ OUT OF U AND ME
5) TIMING, TIMING, TIMING
6) UNCHECKED EMOTION
7) DEMOGRAPHIC CONSIDERATIONS
8) “IT AIN’T OVER ‘TILL IT’S OVER”
This article goes into more detail on each subject, and was a great read.
Do you think there are more reasons deals fail? What is the worst deal fallout that you worked on or read about? How many deals do you think fail a year? (example 1/5 or 20% or any other number/percentage you have experienced or believe is correct)
Happy Monday everyone, keep grinding out there.
Disclosure: I am actually in the interview process with investmentbank.com for a remote internship starting next semester of school (August). This is a publicly available article, however it was sent to me in an email.
Deals failing in IB are annoying, but that's really all they are at the analyst level. I was always annoyed for a day or two because I wouldn't get a deal toy, but then I moved on.
Now that I'm in corp dev where completing deals is tantamount to my company's growth strategy and where my bonus is linked to my company's performance, it affects me much more. The absolute worst is when the deal fails because management failed to disclose something. I work for an industrial manufacturer, so environmental regulatory compliance, safety, OSHA violations, asbestos liabilities, IP, etc. all matter a great deal. Imagine if you're halway through the deal and management "finds out" they "forgot" to disclose a string of OSHA violations or that they were just served by a class of asbestos victims or that they forgot to file a form with the US patent office. The deal usually ends immediately. Worst is if we've spent months on this deal.
Good post, so if you were an analyst in IB is it tough to work on a deal that doesn't get done?
I would say it depends on the reason(s) why the deal failed and how close it was to closing. Having a founder blow up a deal at the very last moment because they got cold feet can be super fucking annoying for example.
The buyer and seller realizing their comradery with each other isn't as good as they thought. This is usually found out deep into the due diligence phase.
Deal or No Deal - How often do deals fail? (Originally Posted: 09/16/2011)
Our group has the opportunity to do a deal that can not close or be sold in the U.S.
My boss has me calling around the world pitching a meeting. I can't get an audience being that nobody wants to undertake a huge debt load a this time. How do I tell my boss to just let it go? There is a bit of moral hazard involved and he doesn't want to hear it. All he wants is the take home (Me too, but where do you draw the line).
How often do this type of deals fail? Am i being a pussy?
what type of bank do you work at?
Let's try this again. Ring, ring is njmonkey there? The deal spread pays really well but its going to be extremely hard to close. Not only that but I dont know if the issuer will be able to repay the whole issue. Should I tell my boss to forget it? or just pull a Goldman?
Me and my bros will buy it bro
Brosef Stalin
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