Unlocking Value Through M&A: The Art of Seeing the Unseen
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Article originally posted on https://unclehuat.com/
Unlocking Value Through M&A: The Art of Seeing the Unseen
Ever been in a situation where you’re convinced you’re right, only to have someone prove you completely wrong—and teach you a lesson you’ll never forget? Yeah, me too.
Years ago, I was deep in the trenches of an M&A deal, arguing with an MD from a global investment bank. Let’s call him Andrew. We were running a divestiture, and the first-round bids were in. Two bidders were solid contenders, a third was ruled out, and then there was this fourth guy—offering 20% less than even the one we’d just rejected. In my mind, this was an easy call. Cut them loose.
But Andrew? He was adamant.
“Forget the bid,” he said. “This is Round 1. They’re the right buyer. They just don’t know it yet. We haven’t done a good enough job showing them why. Give me time—I’m confident they’ll end up at the top.”
I wasn’t convinced, but I made him a deal: If he was wrong, he’d kiss half a million dollars of his fee goodbye. He agreed.
And then, I watched a master at work.
Andrew reverse-engineered every part of their valuation. Without even seeing their model, he figured out where their assumptions were off—underestimating revenue growth, overestimating marketing costs. He worked his magic, guiding them to see what he saw. A few weeks later, they’d raised their bid by 30%. Meanwhile, the other bidders lost confidence and lowered theirs.
The result? The buyer I wanted to kick out won the auction—by 15%.
Andrew didn’t just find the best buyer; he made them the best buyer. And I learned a lesson that’s stuck with me ever since: In M&A, success often comes down to seeing the signal in the noise.
Why M&A?
At its core, M&A is about finding the best possible owner for a business. And the best owner? They’re the one who can extract the most value—whether through synergies, financial engineering, or just pure operational excellence.
But here’s the kicker: The best owner doesn’t always start out as the highest bidder. That’s why deals fall apart when buyers overpay based on flawed assumptions, or when sellers fail to see potential in the “wrong” places.
And if you’re thinking, Well, it must work pretty well if companies keep doing it, consider this: 70–90% of M&A deals fail. Yep, fail—as in, they destroy shareholder value. Harvard Business School says so, and who am I to argue? I don’t even have a business degree from Harvard.
Why Does M&A Fail?
Most deals go wrong for one of these three reasons:
Wrong Target – Poor fit, bad strategy, unrealistic expectations.
Wrong Deal – Overpaying, weak due diligence, terrible timing.
Wrong Execution – Botched integration, cultural clashes, operational chaos.
And let’s be honest—ego plays a huge role. Execs love empire-building. Bigger companies mean bigger paychecks, bigger influence. But size doesn’t equal success. And when CEOs think they’ve got the Midas touch, things get dangerous fast.
The 10–30% That Get It Right
Enough with the doom and gloom. Some deals do work. What separates them from the disasters?
Four things:
A Strong Core Business – M&A can’t fix a broken company. If your house is on fire, don’t go house shopping—put out the flames first.
A Solid Acquisition Case – If you can’t validate the numbers, you’re gambling, not investing.
A Lean, Expert Deal Team – No fluff, no politics, just the best people making smart decisions.
Flawless Integration & Execution – Great plans don’t matter if you don’t have rockstars leading the charge.
M&A isn’t just a financial transaction—it’s a high-stakes game of strategy, psychology, and execution. And like any game, the best players see what others don’t.
So, next time you’re looking at a deal, ask yourself: Are we seeing the real opportunity, or just the noise?
And if you’re ever unsure—find your own Andrew.