When the Transaction Has to Hold
An architect's reading on why the real test of a transaction often comes after closing.
Architecture of Return · Issue 14 · The Architect's Reading · Volume I Close
By Chudi Ofili · Founder & Transactional Architect
One of the things I came to notice from working on transactions over the years is how little a clean closing tells you about how well a transaction has been built. At closing, everything can appear to have worked as intended. The approvals are in place, counsel has signed off, the funds have moved and the investment team quite reasonably turns its attention to what comes next.
It is often only later that the weaknesses become visible. The typical scenarios are the company needs another round of capital, circumstances require the governance arrangements to change, or an eventual buyer begins asking questions that send everyone back to decisions made several years earlier. None of those decisions necessarily looked wrong when they were made. In many cases, each was perfectly defensible on its own. The problem is that they do not always continue to work together as the transaction changes.
In my view, that is a more demanding test of how well a transaction was structured. Not simply whether it could close, but whether the decisions made at closing continue to support the investment in the years that follow.
What this Looks Like in a Transaction
An acquisition is a useful example. When a strategic buyer arrives several years after the original investment, it will inevitably ask questions that were not front of mind when the deal was done. Some of the questions could not reasonably have been anticipated at all. The issue is, therefore, not whether the original transaction somehow predicted the buyer. It is what happens when those new requirements meet the structure that is already there.
Sometimes the answer is surprisingly little. The existing governance arrangements can accommodate what needs to happen, ownership of the relevant assets is clear, the necessary approvals can be obtained without reopening unrelated issues, and the advisers have a common commercial position to work from. In other cases, one new requirement begins pulling at several old decisions at once. The difference is often only fully appreciated when the parties are under time pressure.
Transactional Integrity
When the parts of a transaction continue to support its commercial purpose as circumstances change, the transaction has what I have come to think of as Transactional Integrity.
Transactional Integrity does not mean permanence. Transactions change, sometimes substantially. The point is not to preserve the original structure at all costs, but to preserve the commercial logic of the investment as the structure changes around it.
Good legal, tax, financial and regulatory advice remain essential, but each adviser is responsible for a different part of the transaction. Someone still has to hold how those parts work together.
Where this Leaves the Argument
When I began the Architecture of Return fourteen issues ago, I was primarily interested in the conditions that make institutional capital easier to deploy into African markets. The argument has moved since then, partly because writing the series forced me to follow some of those questions further than I originally intended.
I have become less interested in whether a transaction looks institutionally sophisticated at closing and more interested in what it remains capable of doing afterwards. Can it accept new capital without unnecessary reconstruction? Can its governance adapt when circumstances change? Can the people around the transaction make new decisions without discovering that old ones are working against them? Finally, when there is eventually an opportunity to realise value, does the structure help or hinder that process?
That is where I would leave the first volume of the Architecture of Return. The value of architecture is ultimately not in how elegantly a transaction is put together. It is in whether the transaction continues to work when the circumstances around it no longer look like they did on the day it closed.
SOVEREIGN SUMMARY A transaction is not fully tested at closing. The value of architecture becomes clearer over time, when the circumstances around a transaction no longer look like they did on the day it closed and the decisions made at the beginning are required to keep working together. |
CATCH UP WITH VOLUME I OF THE RESEARCH
This issue concludes Volume I of Architecture of Return, BACH Global's ongoing research programme on Transactional Architecture™, institutional capital and cross-border capital deployment in African markets. Explore Volume 1 below.
Until the next volume,
Chudi Ofili
Founder & Transactional Architect
BACH Global
Architecture of Return is BACH Global’s research programme on Transactional Architecture™, institutional capital and cross-border capital deployment in Africa.
© 2026 BACH Global Strategy Inc. The frameworks and terminology referenced in this issue, including Transactional Architecture™, Transactional Integrity, the Reality Gap, Deal Drag, Structural Debt, Default Thinking, Governance Drift, Governance Engineering, Pathway Clarity, IP Sequencing, IP Ring-Fencing, Friction Pricing, Exit Thinking, Liquidity Architecture, the Liquidity Pathway, the Structural Core, the TCA, and the SAR, are proprietary to BACH Global.
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