Behind the Money
When M&A goes wrong
Apr 24, 2024
A private equity firm's acquisition of a California grocery store chain goes awry, potentially costing the owners millions. The podcast explores the complexities and legal disputes that arise from M&A deals, highlighting the importance of contract clarity and alignment of goals between buyers and sellers to avoid costly disputes.
20:39
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Quick takeaways
- Disputes over debt in M&A deals can lead to costly legal battles post-closure.
- Clear communication and meticulous contract drafting are crucial to avoid unexpected challenges in acquisitions.
Deep dives
Private Equity Deal Challenges
In the podcast episode, the host delves into the complexities of a private equity deal involving the acquisition of a grocery store chain called Save Mart by a private equity firm called Kingswood Capital Management. The deal seemed typical at first, with negotiations leading to a debt-free, cash-free acquisition in which Kingswood paid approximately $109 million for Save Mart. However, a significant dispute arose post-closure, highlighting unexpected challenges that can occur in M&A deals, especially in privately owned companies.
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