Assess whether related-party sales should be backed out of valuation (d55047)

SITUATION A live M&A Due Diligence People and Contracts file in a roll-up of three regional service companies now turns on IP ownership vs. contractor agreements after a founder who will not sign a non-compete. Buy-side QoE lead should state what that extract proves for whether related-party sales should be backed out of valuation.

DECISION Buy-side QoE lead in a roll-up of three regional service companies must choose Proceed / Reprice / Walk / Hold using IP ownership vs. contractor agreements after a founder who will not sign a non-compete.

HYPOTHESES TO TEST 1. A founder who will not sign a non-compete is noise around an already-controlled People and Contracts process in a roll-up of three regional service companies, given IP ownership vs. contractor agreements. 2. A founder who will not sign a non-compete is the event in IP ownership vs. contractor agreements that forces Proceed for buy-side QoE lead under M&A Due Diligence. 3. IP ownership vs. contractor agreements shows a one-file miss after a founder who will not sign a non-compete, not a People and Contracts program failure. 4. IP ownership vs. contractor agreements cannot decide related-party sales should be yet after a founder who will not sign a non-compete; hold is the only M&A Due Diligence close a roll-up of three regional service companies can defend.

ANALYSIS REQUIRED 1. Tie quality-of-earnings, working-capital, and contingent items in IP ownership vs. contractor agreements to related-party sales should be. 2. Name the document buy-side QoE lead still needs before signing. 3. Test whether a founder who will not sign a non-compete is a diligence gap, a price chip, or a walk-away. 4. For this M&A Due Diligence People and Contracts file, read IP ownership vs. contractor agreements against a founder who will not sign a non-compete and write the one fact that would move related-party sales should be for buy-side QoE lead.

RECOMMENDATION Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / People and Contracts packet (IP ownership vs. contractor agreements after a founder who will not sign a non-compete). If IP ownership vs. contractor agreements cannot force a M&A Due Diligence label under People and Contracts, stop. If IP ownership vs. contractor agreements after a founder who will not sign a non-compete cannot support Proceed versus Reprice on this M&A Due Diligence People and Contracts close, buy-side QoE lead must do not proceed, reprice, or walk on a quality-of-earnings fact the packet does not carry.

COMMAND RETURNS - Bottom-line M&A Due Diligence option on related-party sales should be, then the evidence in IP ownership vs. contractor agreements, then the action for buy-side QoE lead - Hypothesis scorecard against IP ownership vs. contractor agreements: supported / rejected / untestable - Regulatory or exam hook People and Contracts would cite - People and Contracts finding in IP ownership vs. contractor agreements that a second reviewer can re-perform