Assess whether a top customer is actually sticky (05f8ca)

Situation

Customer-contract risk reviewer in a strategic buyer looking at a carve-out from a conglomerate has one working extract — management-team retention and key-person map — after add-backs that are just delayed opex. If management-team retention and key-person map cannot support a top customer is actually sticky, the honest M&A Due Diligence output is hold.

Decision

Customer-contract risk reviewer in a strategic buyer looking at a carve-out from a conglomerate must choose Proceed / Reprice / Walk / Hold using management-team retention and key-person map after add-backs that are just delayed opex.

Hypotheses to test

• Authorize Proceed now; management-team retention and key-person map already has the discriminator after add-backs that are just delayed opex.
• Keep Reprice in force until management-team retention and key-person map is completed after add-backs that are just delayed opex for customer-contract risk reviewer.
• Treat management-team retention and key-person map as Walk because both readings appear after add-backs that are just delayed opex.
• Refuse a M&A Due Diligence close: customer-contract risk reviewer does not have the page a top customer is actually sticky turns on in management-team retention and key-person map.

Analysis required

• Map reps, earnout mechanics, and integration risk a strategic buyer looking at a carve-out from a conglomerate would inherit.
• Tie quality-of-earnings, working-capital, and contingent items in management-team retention and key-person map to a top customer is actually sticky.
• Name the document customer-contract risk reviewer still needs before signing.
• For this M&A Due Diligence Separation and Integration file, read management-team retention and key-person map against add-backs that are just delayed opex and write the one fact that would move a top customer is actually sticky for customer-contract risk reviewer.

Recommendation

Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / Separation and Integration packet (management-team retention and key-person map after add-backs that are just delayed opex). The follow-on Separation and Integration action is what customer-contract risk reviewer does next: implement the option, assign an owner, and log the missing fact.