Assess whether environmental liability is capped or open-ended after IT

Situation

A public acquirer facing HSR and sector regulators cannot treat IT diligence showing two ERPs and no chart of accounts map as color commentary on revenue-quality bridge from bookings to cash. Working-capital true-up analyst must close environmental liability is capped from that extract under M&A Due Diligence / Earnings and Revenue Quality.

Decision

Working-capital true-up analyst in a public acquirer facing HSR and sector regulators must choose Environmental liability is capped / Open-ended using revenue-quality bridge from bookings to cash after IT diligence showing two ERPs and no chart of accounts map.

Hypotheses to test

• IT diligence showing two ERPs and no chart of accounts map is noise around an already-controlled Earnings and Revenue Quality process in a public acquirer facing HSR and sector regulators, given revenue-quality bridge from bookings to cash.
• IT diligence showing two ERPs and no chart of accounts map is the event in revenue-quality bridge from bookings to cash that forces Environmental liability is capped for working-capital true-up analyst under M&A Due Diligence.
• Revenue-quality bridge from bookings to cash shows a one-file miss after IT diligence showing two ERPs and no chart of accounts map, not a Earnings and Revenue Quality program failure.
• Revenue-quality bridge from bookings to cash cannot decide environmental liability is capped yet after IT diligence showing two ERPs and no chart of accounts map; hold is the only M&A Due Diligence close a public acquirer facing HSR and sector regulators can defend.

Analysis required

• Map reps, earnout mechanics, and integration risk a public acquirer facing HSR and sector regulators would inherit.
• Tie quality-of-earnings, working-capital, and contingent items in revenue-quality bridge from bookings to cash to environmental liability is capped.
• Name the document working-capital true-up analyst still needs before signing.
• For this M&A Due Diligence Earnings and Revenue Quality file, read revenue-quality bridge from bookings to cash against IT diligence showing two ERPs and no chart of accounts map and write the one fact that would move environmental liability is capped for working-capital true-up analyst.

Recommendation