M&A Mistakes That Can Derail Your Deal (And How to Avoid Them)

Most deals don’t fall apart because of one major issue—they fall apart because of small problems that stack up over time. In this episode of An Ounce of Prevention, host Rachel Reese sits down with Alex Sanchez, Director in Bridgepoint Consulting’s Dallas–Fort Worth practice, to break down what actually drives deal success (or failure) in the middle market and why preparation before a sale matters more than anything that happens during negotiations.Alex shares how his team helps companies prepare for transactions by aligning financials with operations, identifying risks early, and ensuring that the story a company tells is backed by real, defensible data. He explains why messy financials, unclear revenue streams, and lack of alignment between teams can quickly erode buyer confidence and reduce valuation—even when the underlying business is strong.The conversation also dives into the most common deal breakers, including revenue quality, customer concentration, missing or weak contracts, and underestimated working capital needs. Alex and Rachel discuss why these issues are rarely fatal on their own, but become problematic when they aren’t identified and addressed early. They also explore the challenges around earnouts, how misaligned incentives can drive the wrong behavior post-close, and why many buyers are becoming more cautious about relying on them.Before the discussion, Rachel delivers a case law update on Anadarko v. Alternative Environmental Solutions, a Fifth Circuit decision highlighting how choice of law and indemnity provisions operate in multi-state contracts. The court upheld the application of Texas law based on the parties’ agreement and reinforced that indemnity provisions can require one party to cover litigation costs arising from its own violations—even in complex, multi-jurisdictional disputes. The case underscores how contract structure can directly impact financial exposure in litigation.If you’re preparing for a transaction, evaluating a potential acquisition, or thinking about how to protect value in a deal, this episode offers a practical look at where deals go wrong—and how to get ahead of those issues before they cost you.Time Stamps / Chapters00:00 — Introduction to the podcast00:34 — Host intro and case law update setup01:14 — Anadarko v. AESI: case overview, indemnity dispute, and choice-of-law ruling 04:51 — Practical takeaway: contract structure and risk exposure05:27 — Guest introduction: Alex Sanchez, Bridgepoint Consulting06:16 — Getting a company ready for sale: aligning financials and operations08:08 — How messy data and weak financials reduce valuation10:23 — Key deal risks: revenue quality and customer concentration12:42 — Importance of contracts and diligence depth13:50 — Legal and finance alignment in transactions14:57 — Earnouts and the risks of misaligned incentives17:54 — Integration challenges and execution realities21:02 — Bridging the gap between operators and private equity23:15 — Final thoughts: ensuring value matches what you pay for