Assess whether integration costs were sandbagged in the CIM (4a3647)

Situation

Legal, IP, and Regulatory work in a family-office reviewing a manufacturing target now turns on integration costs were sandbagged because IT diligence showing two ERPs and no chart of accounts map put working-capital peg versus seasonal reality in play. Customer-contract risk reviewer should say what working-capital peg versus seasonal reality proves.

Decision

Customer-contract risk reviewer in a family-office reviewing a manufacturing target must choose Proceed / Reprice / Walk / Hold using working-capital peg versus seasonal reality after IT diligence showing two ERPs and no chart of accounts map.

Hypotheses to test

• Working-capital peg versus seasonal reality reads as Proceed once IT diligence showing two ERPs and no chart of accounts map is lined up to the same M&A Due Diligence population.
• Working-capital peg versus seasonal reality is closer to Reprice after IT diligence showing two ERPs and no chart of accounts map; Proceed would over-claim this Legal, IP, and Regulatory extract.
• Walk is still live in working-capital peg versus seasonal reality for customer-contract risk reviewer in a family-office reviewing a manufacturing target.
• Working-capital peg versus seasonal reality is missing the fact customer-contract risk reviewer needs after IT diligence showing two ERPs and no chart of accounts map; stop this M&A Due Diligence close.

Analysis required

• Tie quality-of-earnings, working-capital, and contingent items in working-capital peg versus seasonal reality to integration costs were sandbagged.
• Name the document customer-contract risk reviewer still needs before signing.
• Test whether IT diligence showing two ERPs and no chart of accounts map is a diligence gap, a price chip, or a walk-away.
• For this M&A Due Diligence Legal, IP, and Regulatory file, read working-capital peg versus seasonal reality against IT diligence showing two ERPs and no chart of accounts map and write the one fact that would move integration costs were sandbagged for customer-contract risk reviewer.

Recommendation

Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / Legal, IP, and Regulatory packet (working-capital peg versus seasonal reality after IT diligence showing two ERPs and no chart of accounts map). The follow-on Legal, IP, and Regulatory action is what customer-contract risk reviewer does next: implement the option, assign an owner, and log the missing fact.