Insights
How to Make Sure Your Vendor Does Not Drop the Ball
What you outsource is the work, never the responsibility. State the requirements in numbers, hold the process to a cadence, keep every piece of working paper, and the vendor will not drop the ball.
No Contract Guarantees Lasting Terms
A carefully drafted agreement protects what you can recover, not whether your counterparty stays. In Chinese partnerships, the economics of the deal matter more than the wording of the contract.
Why Reported EBITDA Disappears After Closing in China M&A
EBITDA on a historical statement reflects the seller's tolerance for unbooked costs, not the cash flow a new owner will inherit. In Chinese service businesses, professional governance strips away hidden subsidies in seconds: founder workload absorbed without salary, family payroll, pass-through trading revenue, and irreconcilable receivable ledgers. A rigorous operational QoE distinguishes durable cash from noise.
Why Founders Own Earnings That Acquirers Cannot Buy
A Chinese services company can generate strong trailing EBITDA while its real earning power lives entirely inside one founder's phone contacts, personal supplier relationships, and undocumented technical know-how. Capital markets discount acquisition multiples when institutional value cannot detach from individuals. Transferring earnings ownership requires surgical handover mechanisms baked into the purchase agreement, not generic retention bonuses.