Assess whether a top customer is actually sticky (140147)

Situation

In a cross-border deal with earnout-heavy structure, customer concentration and termination-for-convenience clauses is the evidence after a customer who just sent a non-renewal. Working-capital true-up analyst has to pick Proceed or Reprice for this M&A Due Diligence Separation and Integration close using customer concentration and termination-for-convenience clauses.

Decision

Working-capital true-up analyst 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 customer who just sent a non-renewal.

Hypotheses to test

• The population in customer concentration and termination-for-convenience clauses is the one a customer who just sent a non-renewal named, so Proceed follows for this Separation and Integration file.
• The population in customer concentration and termination-for-convenience clauses is adjacent only to a customer who just sent a non-renewal; Reprice is the honest M&A Due Diligence call.
• A cross-border deal with earnout-heavy structure already contained a customer who just sent a non-renewal before customer concentration and termination-for-convenience clauses arrived; no new Separation and Integration path.
• Provenance on customer concentration and termination-for-convenience clauses after a customer who just sent a non-renewal is broken; do not pick Proceed or Reprice yet.

Analysis required

• Tie quality-of-earnings, working-capital, and contingent items in customer concentration and termination-for-convenience clauses to a top customer is actually sticky.
• Name the document working-capital true-up analyst still needs before signing.
• Test whether a customer who just sent a non-renewal is a diligence gap, a price chip, or a walk-away.
• For this M&A Due Diligence Separation and Integration file, read customer concentration and termination-for-convenience clauses against a customer who just sent a non-renewal and write the one fact that would move a top customer is actually sticky for working-capital true-up analyst.

Recommendation

Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / Separation and Integration packet (customer concentration and termination-for-convenience clauses after a customer who just sent a non-renewal). The follow-on Separation and Integration action is what working-capital true-up analyst does next: implement the option, assign an owner, and log the missing fact.