Whether the carve-out is operable on day one from customer concentration

Situation

Customer concentration and termination-for-convenience clauses arrived with a founder who will not sign a non-compete for customer-contract risk reviewer. That is a M&A Due Diligence Earnings and Revenue Quality decision on the carve-out is operable in a cross-border deal with earnout-heavy structure.

Decision

Customer-contract risk reviewer in a cross-border deal with earnout-heavy structure must choose Proceed / Reprice / Walk / Hold using customer concentration and termination-for-convenience clauses after a founder who will not sign a non-compete.

Hypotheses to test

• Customer concentration and termination-for-convenience clauses reads as Proceed once a founder who will not sign a non-compete is lined up to the same M&A Due Diligence population.
• Customer concentration and termination-for-convenience clauses is closer to Reprice after a founder who will not sign a non-compete; Proceed would over-claim this Earnings and Revenue Quality extract.
• Walk is still live in customer concentration and termination-for-convenience clauses for customer-contract risk reviewer in a cross-border deal with earnout-heavy structure.
• Customer concentration and termination-for-convenience clauses is missing the fact customer-contract risk reviewer needs after a founder who will not sign a non-compete; stop this M&A Due Diligence close.

Analysis required

• Tie quality-of-earnings, working-capital, and contingent items in customer concentration and termination-for-convenience clauses to the carve-out is operable.
• Name the document customer-contract risk reviewer still needs before signing.
• Test whether a founder who will not sign a non-compete is a diligence gap, a price chip, or a walk-away.
• For this M&A Due Diligence Earnings and Revenue Quality file, read customer concentration and termination-for-convenience clauses against a founder who will not sign a non-compete and write the one fact that would move the carve-out is operable for customer-contract risk reviewer.

Recommendation

Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / Earnings and Revenue Quality packet (customer concentration and termination-for-convenience clauses after a founder who will not sign a non-compete). Lead with the M&A Due Diligence option customer concentration and termination-for-convenience clauses can support after a founder who will not sign a non-compete, then the two facts that force it, then the Monday action for customer-contract risk reviewer in a cross-border deal with earnout-heavy structure.