The proposed workshop acquisition had a price of ₹32 crore and an appealing place in our network. Its premises, people and current customer activity made the expansion easy to picture. Diligence then examined 26 service permissions relevant to the operating account. Under the particular fictional agreements, eighteen required fresh counterparty consent and eight were transferable. That did not mean every consent would be refused. It meant the business we wanted to operate after completion depended on decisions that were not yet ours to assume.
Some commercial colleagues thought the permissions would follow once the transaction was agreed. Their confidence came from seeing an established workshop already doing the work. Technical and legal colleagues asked whether the buyer could rely on the same position after the proposed change. I found the second question essential to the strategy. A seller's current activity may explain why a business is attractive, but it does not by itself establish every condition of the purchaser's future operating model. The proposal needed to account for that difference before the price could be judged usefully.
Describe what remains available after completion
The relevant unit of analysis was not only the workshop as it stood. It was the service enterprise we would have after the agreement took effect. That required a clear account of the assets, staff, customer arrangements and permissions on which the proposed work depended. In our case, the review distinguished eight transferable permissions from eighteen requiring fresh consent. The categories were material to the business case. They could not be combined into a statement that all 26 had somehow been acquired merely because they appeared in the seller's current operation.
This is not a general legal assertion about how every permission behaves in a transaction. The case concerns the specific terms identified in an invented acquisition. Different agreements could create different questions, and qualified advisers must assess the actual position. My strategic responsibility was to ensure that the uncertainty identified by those colleagues changed the operating account. I did not need to impersonate their expertise in order to recognise that an unconfirmed condition should not be written as an established capability in the investment proposal.
The distinction can become difficult when the commercial narrative has already taken shape. A location fills a gap, customers appear complementary and a purchase price has entered the discussion. Once the transaction feels like a concrete answer, unresolved conditions can be treated as administrative work to finish later. I wanted to resist that framing where the conditions affected the business itself. There is a difference between completing paperwork for a supported proposition and relying on a future consent to make the proposition operable.
We therefore examined what the eighteen consents meant for the intended scope rather than treating them as one line in a risk list. The question was not whether uncertainty can ever be accepted in an acquisition. It was whether the particular proposal gave us a basis to accept this uncertainty and make the commitment. At the point of decision, we did not have that basis. I recommended declining the transaction in its proposed form through the CEO and the authorised decision makers.
A price concession cannot create a permission
Price can compensate for some kinds of uncertainty, but it cannot automatically resolve the condition that makes an activity possible. A lower amount might have altered the financial discussion. It would not, by itself, have supplied fresh counterparty consent. I did not want the team to confuse an improved bargain with an improved right to operate. The purchase decision needed both an economic account and a supportable description of the business after completion. One could not silently stand in for the other.
The eight transferable permissions also needed careful treatment. They were useful facts, but they did not settle the other eighteen. A favourable part of the review can create a tendency to summarise the whole position more positively than the detail supports. We kept the categories separate so the approving bodies could see what was established and what remained dependent on another party. That was more informative than either declaring the acquisition impossible in principle or presenting the outstanding consents as though they had no strategic consequence.
Declining had a cost. We retained ₹74 lakh of diligence expenditure and did not obtain the larger footprint we had initially considered. The money already spent made the decision uncomfortable, particularly for colleagues who had invested substantial work in the proposal. But sunk effort did not create a reason to treat an unresolved condition as resolved. I wanted the account to acknowledge the cost directly rather than imply that the decision had produced an immediate financial benefit simply because a larger commitment was avoided.
The example does not claim that the counterparties would necessarily have refused consent or that no differently structured proposal could ever work. Those would be conclusions beyond the record. It describes why we declined the particular transaction at the point it was presented. Preserving that boundary is useful because strategic judgement often concerns what can responsibly be decided with the evidence available, not a prediction of every possible future outcome. A later possibility does not make an unsupported present commitment sound.
Diligence is useful when it changes the decision
I see diligence as part of forming the strategy, not merely checking a strategy already chosen. If a review identifies that the proposed business depends on permissions not yet secured, the account should change. It may become narrower, differently structured, conditional or unacceptable. The exact response depends on the facts. In our case, it became a decision not to proceed. That outcome did not make the review wasted; it showed that its findings were allowed to influence the commitment rather than decorate an approval paper.
For directors, the practical question is what management believes it will be able to do on the other side of completion. The answer should distinguish what is transferred, what requires another party's decision and what is merely expected. Directors should have access to the relevant qualified advice without taking over negotiations or technical assessment. Their oversight becomes more useful when the operating consequence is explained in ordinary terms, so that a contractual uncertainty is neither hidden in detail nor exaggerated into a rule that does not apply.
I would bring this case into a first-board conversation as evidence of how I work with other disciplines. The strategic account was improved by technical and legal colleagues asking a question the commercial picture had not answered. My role was to connect their findings to the business case and recommend a decision through the proper authority. That contribution did not require claiming expertise over every agreement. It required respecting the fact that a strategy can depend on conditions someone else is better qualified to assess.
The lesson I retain is precise. A workshop purchase can be easy to imagine and still leave the future service scope uncertain. In this case, eighteen fresh consents mattered enough to stop a ₹32 crore proposal, with ₹74 lakh of diligence expense retained. The profile should show that consequence without inventing a prevented loss or a universal rule about acquisitions. We chose not to buy the business as proposed because the operating account after completion was not sufficiently established. The decision belongs to that account, not merely to the price beside the assets.