Closing Considerations: Partnership & Legacy in Business Acquisitions
When buyers approach a deal, they often focus on financials, due diligence, and structuring. But the final stretch—closing the deal—requires attention to factors that go beyond numbers. Buyers need to consider how they communicate, how they approach working capital, and how they respect the seller’s legacy. Handling these aspects well leads to smoother deals and stronger partnerships after closing.
When buying a business, the closing process is where deals can either succeed or fall apart. Understanding key factors like working capital, financial transparency, and seller expectations can make all the difference. Below covers essential strategies for buyers to ensure a smooth closing while maintaining trust with the seller.
1. Be Thoughtful in Due Diligence
Buyers should be precise when requesting information. Asking for unnecessary details slows down the process and distracts the seller. If you need clarity, ask the seller directly if there are risks you haven’t addressed. Many founders want to help buyers understand the business better. They also appreciate buyers who focus on relevant details instead of requesting excessive documentation.
2. Retrading Hurts Your Reputation
Renegotiating a deal late in the process—damages trust. Some buyers use it as a tactic, but sellers and advisors recognize this behavior. If you genuinely need to adjust the price due to new findings, explain your reasoning clearly. Don’t use vague terms or act as if you’re surprised by standard financial adjustments. Buyers with a history of retrading find it harder to secure future deals.
3. Get Ahead of Working Capital Adjustments
Many disputes happen over working capital after closing. Buyers should clearly define what they expect in simple terms. If you need a certain level of cash flow, accounts receivable, or inventory, state that upfront. Explain the calculation and how it affects the final price. Surprises at closing often create friction, even when the math is correct.
4. Communicate Clearly as Closing Approaches
The final stage of a sale is stressful for sellers, especially those unfamiliar with M&A. Buyers should be clear about closing procedures, post-sale responsibilities, and tax implications. Talk to the company’s controller and financial team early to ensure a smooth transition. A rushed or confusing closing process increases post-sale issues and weakens trust.
Being a better buyer isn’t just about offering the highest price. It’s about running a fair and efficient process, communicating well, and showing respect for the seller’s business. Deals that close smoothly often result in better post-sale partnerships and long-term success.
