Buyer learns the rest of story; terminates offer
A private equity firm was looking at a specialty automotive electronics company with historically excellent margins. We tested the balance sheet and accounting policies related to the assets to be purchased and liabilities to be assumed. The asset and liability valuations supported the purchase price.
But further investigation uncovered that the seller had not disclosed that one of the high margin programs had been discontinued. Armed with the whole story, the private equity group terminated its offer.