Deals that collapse after months of negotiations and work are a tough pill to swallow, he says.
He tells of a vendor who, after 18 months, saw their deal fall apart after experiencing funding challenges. "They got completely exhausted because they put everything in it. There's a lot of diligence involved and expense, transactions and thinking about the future.
"And then it got pulled and now they have had 18 months of going around in circles, and they feel that business has suffered as a result.
"That's a tough situation to be in."
Consolidators typically onboard companies on to their systems and technology for several months before buying them out.
This is a form of de-risking, which allows the consolidator to check the numbers are what the seller said they were, among other things, MacNee explains.
He points to certain risks in smaller business, or lifestyle businesses, where various assets and activities, such as properties, cars and holidays are funded through the company.
"If you could wave your magic wand and say, what's the perfect scenario versus the less perfect one, then a clean balance sheet is the more favourable side," he says.
These are not issues that are insurmountable, he adds, "it just means it has to be dealt with".
"A buyer won't take risk," he adds. This means if there is a debtor on the balance sheet supporting companies or property for tax reasons, this would also need to be dealt with as part of the transaction.
Similarly, salaries that are paid in unconventional ways, or not paid as such, pose potential issues if the business is to be sold as a going concern.
"Let's say the directors aren't likely paying themselves very much, but putting in pension contributions or otherwise," MacNee says.
"In that case, if the buyer is looking to buy it as a going concern, as opposed to buying it for its clients and assets — which a consolidator may consider — then you need to have a cost structure that is sustainable."
If a successor has been identified by the vendor, this could be a good situation to be in but one that comes with further risks, he adds.
"For example, I saw a vendor having to make a less favourable exit than he would ideally like, because the identified team in place was not aligned ultimately to what he wanted to do for them, but also, for his business and clients," he says.
"I've seen other examples where someone thought they had identified successors, but actually, the identified successors were talking to us about setting up their own business. So you have to have that kind of conversation early."
