Assess whether earnout definitions will cause a post-close fight (8274fb)

Situation

Buy-side QoE lead in a roll-up of three regional service companies has one working extract — related-party revenue that disappears at close — after a founder who will not sign a non-compete. If related-party revenue that disappears at close cannot support earnout definitions will cause, the honest M&A Due Diligence output is hold.

Decision

Buy-side QoE lead in a roll-up of three regional service companies must choose Proceed / Reprice / Walk / Hold using related-party revenue that disappears at close after a founder who will not sign a non-compete.

Hypotheses to test

• The population in related-party revenue that disappears at close is the one a founder who will not sign a non-compete named, so Proceed follows for this People and Contracts file.
• The population in related-party revenue that disappears at close is adjacent only to a founder who will not sign a non-compete; Reprice is the honest M&A Due Diligence call.
• A roll-up of three regional service companies already contained a founder who will not sign a non-compete before related-party revenue that disappears at close arrived; no new People and Contracts path.
• Provenance on related-party revenue that disappears at close after a founder who will not sign a non-compete is broken; do not pick Proceed or Reprice yet.

Analysis required

• Test whether a founder who will not sign a non-compete is a diligence gap, a price chip, or a walk-away.
• Separate a one-off add-back from a recurring earnings issue in related-party revenue that disappears at close.
• Map reps, earnout mechanics, and integration risk a roll-up of three regional service companies would inherit.
• For this M&A Due Diligence People and Contracts file, read related-party revenue that disappears at close against a founder who will not sign a non-compete and write the one fact that would move earnout definitions will cause for buy-side QoE lead.

Recommendation

Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / People and Contracts packet (related-party revenue that disappears at close after a founder who will not sign a non-compete). The follow-on People and Contracts action is what buy-side QoE lead does next: implement the option, assign an owner, and log the missing fact.