I can't stress how important the due diligence is. I have no hesitation in calling a deal "a dud deal" when the due diligence and figures don't stack, and neither should you.
I've found that successful acquirers view due diligence as much more than an exercise in verifying data. Due diligence dissects a business, reveals strengths and weaknesses and exposes unreliable assumptions that may affect the the end price.
I'm happy to talk through the due diligence process in more detail but as a starter, you should focus on four basic questions:
1. What are we buying?
2. What is the target’s stand-alone value?
3. Where are the synergies—and the skeletons?
4. What’s our walk-away price?
Know your key rationale rather than deal fever and a momentum to just close the deal.
Music streaming service Spotify has abandoned its bid to takeover rival platform SoundCloud after months of talks, TechCrunch reports, citing a source familiar with the discussions. In September, the Financial Times reported the two European firms were in advanced talks over an acquisition. TechCrunch now reports that the discussions ended because Spotify feared the deal would have a negative impact as it moves towards an initial public offering (IPO). Numerous media reports have suggested that Spotify is poised to float next year though the company has not officially confirmed this.