Assess whether earnout definitions will cause a post-close fight (90be49)

Situation

Customer concentration and termination-for-convenience clauses arrived with a TSA that expires before replacement systems exist for carve-out separation lead. That is a M&A Due Diligence People and Contracts decision on earnout definitions will cause in a health-system acquiring a specialty practice.

Decision

Carve-out separation lead in a health-system acquiring a specialty practice must choose Proceed / Reprice / Walk / Hold using customer concentration and termination-for-convenience clauses after a TSA that expires before replacement systems exist.

Hypotheses to test

• The population in customer concentration and termination-for-convenience clauses is the one a TSA that expires before replacement systems exist named, so Proceed follows for this People and Contracts file.
• The population in customer concentration and termination-for-convenience clauses is adjacent only to a TSA that expires before replacement systems exist; Reprice is the honest M&A Due Diligence call.
• A health-system acquiring a specialty practice already contained a TSA that expires before replacement systems exist before customer concentration and termination-for-convenience clauses arrived; no new People and Contracts path.
• Provenance on customer concentration and termination-for-convenience clauses after a TSA that expires before replacement systems exist is broken; do not pick Proceed or Reprice yet.

Analysis required

• Test whether a TSA that expires before replacement systems exist is a diligence gap, a price chip, or a walk-away.
• Separate a one-off add-back from a recurring earnings issue in customer concentration and termination-for-convenience clauses.
• Map reps, earnout mechanics, and integration risk a health-system acquiring a specialty practice would inherit.
• For this M&A Due Diligence People and Contracts file, read customer concentration and termination-for-convenience clauses against a TSA that expires before replacement systems exist and write the one fact that would move earnout definitions will cause for carve-out separation lead.

Recommendation

Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / People and Contracts packet (customer concentration and termination-for-convenience clauses after a TSA that expires before replacement systems exist). Lead with the M&A Due Diligence option customer concentration and termination-for-convenience clauses can support after a TSA that expires before replacement systems exist, then the two facts that force it, then the Monday action for carve-out separation lead in a health-system acquiring a specialty practice.