Here’s how it went down:
- our M&A team identified a top-notch content website off-market
- the asset owner was interested in selling for mid-6-figures
- short and partial main DD came back without a red flag, but the asset owner was very reluctant in sharing confidential data, even with NDA. So we moved any open topics to the closing phase
- signed purchase agreement 🍾
- transferred the funds to Escrow, but had a delay due to international payments
- seller got cold feet and backed out of the deal, now demanding that we can review the open (and critical) topics only after full payment to the seller’s account has been made
💥 deal went south
Our 5 learnings from this one:
- Be fair, but strict when it comes to the M&A process
- Always use Escrow to protect your funds during the transition period
- As an investor, never fall for the sunk cost fallacy
- Off-market deals without a sell-side advisor require more communication and time than on-market deals
- Switched bank account and Escrow to be able to wire funds within 48 hours. At TreasureHunter, we always seller-first