It was a bolt-on acquisition, a perfect fit, and a small deal. And it died. It died because of the relationship, or lack thereof.
The buyer and seller seemed to get along fine but a few things happened that caused the buyer to not trust the seller to deliver on post-close obligations.
It started when the seller asked to delay the closing by one month, which didn’t fit the buyer’s plans because that month was a high revenue month (while the next month was a low revenue month), the buyer had other initiatives tied to the acquisition, and some comments made (by the seller’s team) brought to light the fact the seller’s wife was a lot more important to the business than previously claimed.
Then a very reasonable purchase and sale agreement was virtually destroyed by the seller’s attorney. All the legal language issues aside, the edits made it very clear the wife wouldn’t be available for much transition support. This after realizing she is the key employee. Plus, there was again language about delaying the closing date.
Trust is a synonym for relationship. Whether you’re a buyer or a seller, when your gut tells you something is wrong, the chances are high something is wrong. In any event, go with your gut feel.