Assess whether related-party sales should be backed out of valuation (1efb94)

SITUATION Customer concentration and termination-for-convenience clauses arrived with a contractor who actually wrote the core code for carve-out separation lead. That is a M&A Due Diligence People and Contracts decision on related-party sales should be in a health-system acquiring a specialty practice.

DECISION Carve-out separation lead in a health-system acquiring a specialty practice must choose Proceed / Reprice / Walk / Hold using customer concentration and termination-for-convenience clauses after a contractor who actually wrote the core code.

HYPOTHESES TO TEST 1. The population in customer concentration and termination-for-convenience clauses is the one a contractor who actually wrote the core code named, so Proceed follows for this People and Contracts file. 2. The population in customer concentration and termination-for-convenience clauses is adjacent only to a contractor who actually wrote the core code; Reprice is the honest M&A Due Diligence call. 3. A health-system acquiring a specialty practice already contained a contractor who actually wrote the core code before customer concentration and termination-for-convenience clauses arrived; no new People and Contracts path. 4. Provenance on customer concentration and termination-for-convenience clauses after a contractor who actually wrote the core code is broken; do not pick Proceed or Reprice yet.

ANALYSIS REQUIRED 1. Test whether a contractor who actually wrote the core code is a diligence gap, a price chip, or a walk-away. 2. Separate a one-off add-back from a recurring earnings issue in customer concentration and termination-for-convenience clauses. 3. Map reps, earnout mechanics, and integration risk a health-system acquiring a specialty practice would inherit. 4. For this M&A Due Diligence People and Contracts file, read customer concentration and termination-for-convenience clauses against a contractor who actually wrote the core code and write the one fact that would move related-party sales should be for carve-out separation lead.

RECOMMENDATION Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / People and Contracts packet (customer concentration and termination-for-convenience clauses after a contractor who actually wrote the core code). The follow-on People and Contracts action is what carve-out separation lead does next: implement the option, assign an owner, and log the missing fact.

COMMAND RETURNS - Bottom-line M&A Due Diligence option on related-party sales should be, then the evidence in customer concentration and termination-for-convenience clauses, then the action for carve-out separation lead - Hypothesis scorecard against customer concentration and termination-for-convenience clauses: supported / rejected / untestable - People and Contracts finding in customer concentration and termination-for-convenience clauses that a second reviewer can re-perform - Missing page in customer concentration and termination-for-convenience clauses after a contractor who actually wrote the core code, if any