In “‘Hot’ M&A market has to cool off, doesn’t it?” Minnesota Lawyer and Finance & Commerce recapped highlights from Faegre Drinker’s 2021 Minneapolis M&A Conference, including takeaways from the “Market Update” panel featuring Minneapolis office leader Steven Kennedy and corporate partner Ryan Miske.
When asked what missteps are common, Kennedy emphasized how a personal touch from buyers is still important even in today’s fast-paced market. “I have seen buyers lose sight of the personal element of the transaction in these frothy markets. When you have a founder involved, they want to see the love all the way through,” he said. “You often see the senior business development person turn it over to the lawyers and the junior folks, and you end up with some really tough issue at the end, and you’ve lost that relationship.” Kennedy added, “Keeping contact between the buyer’s lead person and the key contact on the seller’s side needs to be a priority.”
Regarding higher prices and shorter deal times, Miske explained that in a less-frenzied market, a seller would routinely extend exclusivity to a prospective buyer for 45 days. However, in the current environment, he noted that sellers might not offer exclusivity at all, or they may give a buyer 10 days to complete their due diligence. Miske further stated that he had seen windows to complete due diligence as small as four days.