What happened?
The financial sector is experiencing a significant surge in acquisitions. Acquisitions can be an efficient way to expand distribution, but firms need to do their homework first to avoid a target firm saddling them with hidden liabilities.
In Money Marketing, Technical Director David Boyhan suggested three major red flags to watch out for before moving ahead with any acquisition.
Why does it matter?
Spotting warning signs before completion gives acquirers the chance to price, renegotiate or walk away from a deal, rather than discovering a target firm’s liabilities after the transaction has closed.
Supporting sources
Frequently asked questions
Why are acquisitions increasing in the financial sector?
The financial sector is experiencing a significant surge in acquisitions, often as an efficient way for firms to expand their distribution.
What should firms check before an acquisition?
TCC’s David Boyhan sets out three major red flags acquirers should watch for that can indicate a target firm carries hidden liabilities.
What happens if these red flags are missed?
A target firm may end up saddling the acquirer with liabilities that were not apparent before the deal completed.
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