M&A Deal Points | When Buyers and Sellers Can’t Close the Gap

Even when there is broad alignment on the major terms of a deal, disagreements at the margins can still cause transactions to fall apart. Some of the most common friction points include:

Valuation Gaps

Sellers often focus on the company’s future potential, while buyers focus on execution risk. Bridging the gap between current performance and projected growth can be challenging.

Deal Terms

Earnouts, rollover equity, indemnification, and post-closing employment terms frequently become sticking points, even when valuation is agreed upon.

Due Diligence Issues

Unexpected findings, or simply the intensity of the diligence process—can create tension and shift deal dynamics.

Emotional Considerations

For many sellers, the business represents years of work, trusted employees, and long-standing customer relationships. Letting go is rarely just a financial decision.

Market Conditions

Changes in interest rates, economic outlook, or industry trends can alter how one or both parties view the transaction.

Bottom line: Even strong deals can falter when alignment breaks down at the edges. Success often depends on clear communication, realistic expectations, and a willingness to find creative solutions.