Have any associates actually discovered something during diligence that tanked the deal?

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Is this a RED FLAG????

Very rarely you’ll find something that can’t have a price tag stapled to it, unless the target has FCPA violations in 50 different countries, I guess. I’ve seen deals die because of antitrust issues (authorities likely wouldn’t clear the deal).

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As a acquisition finance associate - no. Assume they don’t get to us if the M&A folks find anything

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Not me, but another associate told me that a deal she was on once tanked because the bathrooms in a building weren’t ADA compliant. Apparently it was a straw that broke the camels back kind of thing

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Maybe not THE thing but yes.

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Yeah I’m in fiNANCE which is I guess why our diligence always seems like a joke, i.e. getting data room access 3 days before closing, reviewing 4 sets of extremely generic “minutes” and org charts from 1998. Oh and giant excel spreadsheets of IP that literally no one opens.

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200+ deals. About a dozen tanked because of my due diligence. Another dozen or so got price reductions. PE world.

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Of course.

Yes

Usually leads to price negotiation and if that’s not settled then the deal tanks until further notice. Sometimes seller comes back in a year or two if they don’t find another buyer for that price.

I was on the sell side and on a diligence call I heard KPMG confirm that a particular entity was disregarded. I happened to have been looking at the LLC agreement earlier that day so i chimed in to say no, it is taxed as a corp. what a nightmare. Turns out it had filed an 8832 a decade ago but had always filed returns as a DRE/part of the parent. Didnt tank the deal but resulted in a month long delay and special indemnity w/$10 million escrow.

Yes. Most egregious was that a known associate of a certain organized crime family turned out to be a silent/under the radar deal backer with deal ownership in excess of KYC thresholds. While everyone wanted to do the deal, our lender's compliance department shut it down.

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