While M&A activity continues to expand in the current environment, we find that many companies are becoming increasingly frustrated in their inability to close strategic acquisitions. The reasons for this are varied, but a common theme is the continuing excess of buyers versus sellers and capital versus available transactions. Most of the companies that are actively “for sale”, are typically represented by an investment banker who is motivated and incented to deliver the highest price for their selling client. While many companies can justify a higher price with the synergies that may accrue to the buyer in a strategic acquisition, the time pressure and limited interaction with management that are typical in a competitive sale process, often sour corporate buyers from actively participating in these types of auctions.
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