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Different views between buyer and seller in the M&A process

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Common potential conflicts between buyer and seller in the course of an M&A process

In the course of any M&A process, conflict situations between the buyer and the seller of a company occur time and again. In M&A practice, we very often see that both parties experience ups and downs in the course of the M&A process. The more professionally both parties are prepared and advised (M&A advisor + lawyer + auditor + tax advisor), the higher the probability of a mutually acceptable negotiation outcome.


Possible conflict potentials in the individual phases of the M&A process. In practice, there are different perceptions regarding:

  • a realistic timetable
  • the mutual clarification of confidentiality between buyer and seller (e.g. topics such as enticement of customers, employees, term, after-effect, ...)
  • the sales procedure itself (bidding procedure, one-on-one, exclusivity, ...)
  • the content and form of the letter of intent (brief or detailed)
  • the valuation of the company (valuation procedure, comparable M&A transactions, financial planning, ...)
  • Structuring of the transaction (cash/shares; immediate purchase price/earn-out payments, debtor warrant, seller loan, debt free/cash free, locked box...) 
  • the guarantees and warranties (buyer's goal: as extensive and detailed as possible; seller's goal: few guarantees and warranties)
  • the amount and term of an escrow account (seller's objective: no escrow account if possible; buyer's objective: the highest possible amount for the escrow account with a term of two years)
  • the non-competition clause for the seller
  • the manner of integration of the acquired company
  • the scope of the due diligence in terms of time and content, up to and including the number of due diligence examiners
  • ....
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KP TECH Beratungsgesellschaft mbH
Maximilianstr. 2
80539 Munich / Germany
Further offices in Berlin, Frankfurt/Main, Duesseldorf

Phone +49 89 21536609-0
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About us

München • London • Philadelphia

KP Tech has been providing consulting services for more than 20 years with a focus on company acquisitions, company sales, company succession, equity capital and company valuation. Our clients include small and medium-sized companies as well as international groups and private equity companies. Most of our clients come from the technology, services and consumer (including e-commerce) & healthcare sectors.

Membership

KP Tech is a member of the Association of German M&A Consultants (VMA), a non-profit alliance of prominent partner-led and independent M&A consulting firms (Frankfurt/Main).