Don't be fooled, page-4

Thank you, Charlie, for sharing this insight...it does make sense. Another trick could be to get the sellers of the business to provide some vendor funding at high interest rate to pay for the acquisition. The acquisition would look profitable on an underlying basis, but the financial costs would be high.

The general rule is that most acquisitions fail to add value. It requires clever management to pick the right businesses to buy, buy at a good price, and to integrate them well into the existing business.