The Numbers Look Perfect - So Why Did Your Client's Acquisition Still Fail?

Last month we covered the funding multiples every CFO should know: 2-3.5x EBITDA, 10-25% buyer contribution, consolidated structures for bigger deals.

But here's what I didn't tell you: deals still fail even when the numbers work perfectly.

Your client's £2M acquisition had everything right on paper. EBITDA multiple of 2.8x. Strong debt service coverage. Clean financials. The lender even gave initial approval.

Then it died anyway.

Here's why - and how to spot the execution pitfalls that catch even experienced CFOs off guard.

The Due Diligence Ambush

What happened: Three weeks into due diligence, the lender found issues that weren't in your original assessment.

The hidden traps:

Management dependency riskThe target's revenue looks diversified across customers. What the initial review missed: 60% comes through relationships the founder personally manages.

The business can't run without them, but they're planning to step back post-acquisition.

System integration complexityThe target uses different accounting software, payment systems, and customer databases. Integration costs weren't modeled. Suddenly the deal economics change.

Working capital surprisesThe target shows £200K working capital on the balance sheet. Due diligence reveals £150K is slow-moving inventory they've been carrying for 18 months.

Your funding requirement just increased by £150K that nobody saw coming.

The Timing Trap

What happened: Everything was on track for a 6-week close. Week 8, you're still waiting.

Why deals drag:

Lender capacity constraintsYour preferred lender hit their quarterly target and slowed new approvals. The backup lender needs to start due diligence from scratch.

Founder availabilityThe target's founder is running the business while also managing due diligence requests. They're overwhelmed and responses slow down.

Legal complexityThe target has supplier contracts with change-of-control clauses. Legal teams need extra time to negotiate consent letters.

Each delay costs momentum and tests everyone's patience.

The Lender Selection Mistake

What happened: You went with the lender offering the best rate, not the best fit.

Where this goes wrong:

Sector experience mattersA lender who's done 50 manufacturing deals will move faster than one doing their first, even if their rate is 50bps higher.

Decision-making structureSome lenders need three committee approvals. Others have delegated authority up to £2M. Speed difference: 3 weeks vs 3 months.

Post-completion supportThe cheapest lender might not offer the working capital facilities your client will need 6 months later.

The CFO's Execution Checklist

Based on deals we've seen succeed and fail, here's what to verify before committing to timelines:

Week 1-2: Foundation check

• Can the business genuinely run without the founder day-to-day?
• Are the management accounts produced monthly and reconciled?
• How complex will system integration be?

Week 3-4: Lender reality check

• Has this lender done similar deals in the last 6 months?
• What's their current pipeline and capacity?
• Who makes the final decision and how long does that typically take?

Week 5-6: Contingency planning

• What happens if working capital is £50K higher than expected?
• Do you have a backup lender already warm?
• Are there any contracts that could delay completion?

The Case That Almost Failed

Recent client wanted to acquire a £3M logistics business. Perfect numbers: 2.5x EBITDA, strong cash flow, experienced team.

Week 4 of due diligence: lender found the target owed £80K in disputed VAT. Not material to the deal, but needed resolving before completion.

The delay? 3 weeks while accountants and HMRC sorted it out.

We kept the deal alive by:

• Negotiating a 3-week extension with all parties
• Having the seller put £80K in escrow to cover any VAT liability
• Using the extra time to finalize working capital adjustments

Deal completed, but it nearly died over something that wasn't in anyone's initial checklist.

The Hard Truth About Execution

Perfect numbers get you to the table. Flawless execution gets you to completion.

When you're managing multiple clients, you can't afford to learn these lessons the hard way. The best CFOs build buffer into their timelines and have backup plans ready.

Want to Stress-Test Your Deal?

Send me your deal structure - I'll run it through our execution checklist and flag any potential delays before they become problems.

Experience from 200+ deals means we've seen most of the ways things can go sideways.

Email: tony@risecap.co.uk

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