Assess whether working capital should be a walk-away after a CIM that omitted

SITUATION Management-team retention and key-person map arrived with a CIM that omitted a material litigation for commercial-diligence partner. That is a M&A Due Diligence People and Contracts decision on working capital should be in a strategic buyer looking at a carve-out from a conglomerate.

DECISION Commercial-diligence partner 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 a CIM that omitted a material litigation.

HYPOTHESES TO TEST 1. Management-team retention and key-person map reads as Proceed once a CIM that omitted a material litigation is lined up to the same M&A Due Diligence population. 2. Management-team retention and key-person map is closer to Reprice after a CIM that omitted a material litigation; Proceed would over-claim this People and Contracts extract. 3. Walk is still live in management-team retention and key-person map for commercial-diligence partner in a strategic buyer looking at a carve-out from a conglomerate. 4. Management-team retention and key-person map is missing the fact commercial-diligence partner needs after a CIM that omitted a material litigation; stop this M&A Due Diligence close.

ANALYSIS REQUIRED 1. Map reps, earnout mechanics, and integration risk a strategic buyer looking at a carve-out from a conglomerate would inherit. 2. Tie quality-of-earnings, working-capital, and contingent items in management-team retention and key-person map to working capital should be. 3. Name the document commercial-diligence partner still needs before signing. 4. For this M&A Due Diligence People and Contracts file, read management-team retention and key-person map against a CIM that omitted a material litigation and write the one fact that would move working capital should be for commercial-diligence partner.

RECOMMENDATION Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / People and Contracts packet (management-team retention and key-person map after a CIM that omitted a material litigation). The follow-on People and Contracts action is what commercial-diligence partner does next: implement the option, assign an owner, and log the missing fact.

COMMAND RETURNS - Bottom-line M&A Due Diligence option on working capital should be, then the evidence in management-team retention and key-person map, then the action for commercial-diligence partner - Hypothesis scorecard against management-team retention and key-person map: supported / rejected / untestable - Owner and next date for commercial-diligence partner in a strategic buyer looking at a carve-out from a conglomerate - What changes working capital should be if a CIM that omitted a material litigation is later withdrawn