Common Pitfalls in M&A – and How to Avoid Them

It’s an understatement to say that delving into a merger with, or the sale or purchase of, a company is a momentous business move. It makes sense that the M&A journey can be fraught with pitfalls. These are the hazards that I, with my decades of M&A experience, find to be quite common and that clients should we aware of as they move
forward with their strategies.

Before Going to Market:

1. Not Planning Thoroughly Before Hiring a Banker
   The selling company should first ask themselves why they want to sell and what they’re hoping for with the outcome. Are they retiring, and their children don’t want to own or run the company? This is a typical M&A scenario in which the owners want to avoid shutting down the company in order to help employees keep their jobs, ensure customers keep a trusted vendor, or secure the funding for their own retirement.
   At TOBIN, we sometimes recommend that the company hire an exit planner to help get their ducks in a row before selling. Are the financial statements in good condition? Are all of the customer and vendor contracts in good order? Is there a written strategic plan? If not, the transaction timeline slows, the narrative suffers, and valuation may take a hit.
   At TOBIN, we often step in at this stage to help stabilize the narrative and shape the opportunity. If you’re not ready, we’ll say so—and connect you with someone who can help prepare you.
2. Waiting Too Long to Sell
   I can’t tell you how often we see this. The company owners can’t face the fact that their family doesn’t want to inherit the company or that they might become feeble and less able to run it one day. But, as energy wanes, health fails or performance dips, so does the business value, making the company less attractive to sell. Our advice is don’t wait—you don’t have to sell the company now, but you need to start planning the sale now.
3. Bankers Who Sell Process, Not Judgment
   Our prospective clients tend to compare our process against our competitors’, who often promise the moon. This is a sticky wicket because we’re way too honest and don’t exaggerate what we can offer. Our process is excellent, but so is everyone else’s. What sets us apart is our judgment and our execution. Deals collapse when intermediaries pursue volume instead of clarity. TOBIN doesn’t do volume. We do precision. We advise, we protect. We filter distractions, neutralize noise, and move clients toward outcomes that preserve both value and dignity.

In the Throes of the Deal

4. Using the Wrong Legal Counsel
   Your legal counsel is a core component of your M&A team—not an afterthought. We insist that our clients—buy-side and sell-side—engage experienced and savvy M&A counsel. It’s non-negotiable, and if you need a referral, we’ll provide it.
   General corporate counsel may be brilliant, but they are not equipped for M&A. Counsel’s role is to ensure that the business intentions are cemented into the legal agreements, including the purchase agreement. When the deal is done well, closing is smooth, post-close issues are rare, and costly renegotiations are avoided.
5. Accepting a Weak Letter of Intent (LOI)
   Having great legal counsel helps when we’re advising a client in this regard, so back to the point above. Discipline matters here. A strong LOI doesn’t just outline price—it addresses structure, escrow, basket size, indemnity, employment and ownership intentions, and other key deal points. Letting those matters slide until the purchase agreement phase is a strategic mistake. If it matters, negotiate it early. Strong counsel will support this. A strong banker will insist on it.
6. Unclear Post-Close Governance
   Many deals crumble after close when control and decision rights turn out to be ambiguous or politically unsustainable. Buyers and sellers must align not only on economics, but also on leadership continuity, voting thresholds, and operational control. If it’s not clear who’s staying, who’s leading, and who’s calling the shots—you’re setting the stage for dysfunction.

The Important Role of the Banker: It’s More Than a Process

At TOBIN, our job isn’t just to get a deal done—it’s to get the right deal done.

Numbers don’t kill deals, people do. Founders, PE sponsors, boards, middle management, lenders—they’re all pulling in subtly different directions. That’s why a banker earns their place at the table. A banker with clarity sees the fracture lines early and gets ahead of them. Incentives, left unexamined, metastasize into litigation, regret, and reputation damage.

At TOBIN, we listen, interpret, structure, and guide. We advocate, negotiate, and protect. We work through complexity with discretion and care.

If that’s what you need—we’re here. And if you’re not ready, we’ll say that, too.