Daddy Buy Me a Business or a Ferrari

boy sitting in front of a ferrari

It was one of those days.. the ones where you know your life is going to change..

This was going to be my first M&A Deal.

From a random meeting in London I had helped put together an acquisition that wasn’t huge in deal size (less than $10 million) but was exciting nonetheless.

Buying a profitable business that was growing and uniquely positioned with valuable licenses in two different financial centres.

I knew the seller.. and the seller’s business.

The buyer I had recently met. Spoiled… Mid 20s, son of a man who had built the family’s wealth in a war-torn chaotic country.

It was his two lieutenants who told me what he was trying to do and which allowed me to connect him to the seller.

The negotiations were very smooth…

Price, terms, post-merger details all quickly agreed.

That morning was the official signing of the SPA and the wire transfer of the funds.

The only question was how much we would have left for celebratory drinks before flying away that day for the Christmas holidays and a glorious New Year.

I arrived. and there were two empty chairs.

The seller and his M&A advisor were sitting and joking together.

The lawyers on both sides were there.. again everyone smiling and talking pleasantly.

Small talk about upcoming flights and holiday plans…

“George, where are they?”

I called…. No response…

Finally, I get a message…. The lieutenant messaged and asked if we could all do a quick conference call..

Sure but puzzled expressions all around…

The lieutenant’s voice came through…”yeah guys we have a problem we can’t make it today…”

The sellers M&A advisor chimed in…”is everything ok? Do we need to reschedule later today or after holidays…?”

Lieutentant…”yeah….ummmm…. it’s a problem….ummm… yeah…we’re not going to do the deal…”

“Excuse… me. “

“Yeah sorry,, He doesn’t want to do it… so he’s pulling out…”

“Why??”

“sorry…again…”

“George, did you know about this?”

They could tell by the look on my face I did not.

And I was furious… even more than the seller’s M&A Advisor.

The Seller was a great sport about it. We grabbed a coffee after the new year rolled around and we spoke about the opportunity he had to make the business more valuable and he decided to keep running it (This was before I launched Sophiall so no engagement unfortunately 😊).

But I was annoyed. Couldn’t the buyer (let’s call him Ferarri) have shown up and told us face to face like a man?

His lieutentant told me later that he got cold feet. That he froze…and effectively dropped a wide-open pass that would have made him millions.

You see, the seller ironically turned down an offer 6 months later that was $3 million more of what he agreed before Christmas.

Ferrari left that all on the table. Eventually his family lost nearly everything in his homeland when the political tide in their country turned.

And today the seller still owns his business and it’s growing even faster.

 

Thinking About Selling Your Business

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But you need to start getting ready now. Don’t be like the 7 out of 10 business owners who put it off until tomorrow and then find out they’re stuck with profitable businesses that no investor wants to buy, or child wants to inherit.

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