A huge topic of discussion in recent days is the potential purchase of Twitter by Elon Musk. An article about this, "Twitter's account of deal shows Musk signing without asking for more info" discusses this procedure. It is incredibly interesting to see real-life deal news being covered in this capacity. Public deals make a lot of headlines but you don't typically get this kind of coverage. This is no ordinary Public deal - most public deals are two public companies merging or a public company acquiring a private company. In both cases, the negotiation and analysis are done in the background. Since this is a Public company being acquired by a private party, the dynamic is much different. Plus since it is on Twitter by Twitter, it is documented in a series of tweets.

The writer clearly misunderstands the private deal process. He frames it as Elon not asking questions before a deal was struck. We call this Due Diligence and the process can be brutal. Here we get a front-row seat!

Since this is being taken private it's very similar to the issues we run into on deals in the lower middle market. We would classify Elon as a highly-qualified HNI (High Networth Individual). He is acting no different than we are used to, except he has a bigger audience. Elon continues to bring up issues to gauge the seller's reaction and set himself up for a potential reduction in price. The seller in this case is the stockholders who continue to overreact. We would never allow a buyer to bring up such issues in such a public way, but since the Seller is 'public' and the company itself is twitter, his actions do not seem too far out of line.

With public sector deals or IPOs, analysis is done in the background. With this deal we get to witness the grind of due diligence: constant negotiation, posturing throughout the process, and often double-meaning requests or statements just to judge a reaction.

A lot of people, even those involved in the deal process, misunderstand the value we bring as M&A Advisors, often characterizing our duties as just 'finding a buyer' or even 'negotiating a deal'. While those two components come with their own set of challenges, ultimately they either happen or do not.

Managing the Due Diligence of a deal can be the toughest, but often our favorite part! While price can be adjusted, often it solidifies the terms of a deal that can make a huge difference which can impact the money the seller walks away with.