Assess whether integration costs were sandbagged in the CIM (727c77)

Situation

Integration-risk PMO owns integration costs were sandbagged inside a roll-up of three regional service companies with carve-out stranded-cost model as the only packet. A Phase II that found groundwater impact is what changed the clock for this M&A Due Diligence Legal, IP, and Regulatory file.

Decision

Integration-risk PMO in a roll-up of three regional service companies must choose Proceed / Reprice / Walk / Hold using carve-out stranded-cost model after a Phase II that found groundwater impact.

Hypotheses to test

• The population in carve-out stranded-cost model is the one a Phase II that found groundwater impact named, so Proceed follows for this Legal, IP, and Regulatory file.
• The population in carve-out stranded-cost model is adjacent only to a Phase II that found groundwater impact; Reprice is the honest M&A Due Diligence call.
• A roll-up of three regional service companies already contained a Phase II that found groundwater impact before carve-out stranded-cost model arrived; no new Legal, IP, and Regulatory path.
• Provenance on carve-out stranded-cost model after a Phase II that found groundwater impact is broken; do not pick Proceed or Reprice yet.

Analysis required

• Test whether a Phase II that found groundwater impact is a diligence gap, a price chip, or a walk-away.
• Separate a one-off add-back from a recurring earnings issue in carve-out stranded-cost model.
• Map reps, earnout mechanics, and integration risk a roll-up of three regional service companies would inherit.
• For this M&A Due Diligence Legal, IP, and Regulatory file, read carve-out stranded-cost model against a Phase II that found groundwater impact and write the one fact that would move integration costs were sandbagged for integration-risk PMO.

Recommendation

Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / Legal, IP, and Regulatory packet (carve-out stranded-cost model after a Phase II that found groundwater impact). Lead with the M&A Due Diligence option carve-out stranded-cost model can support after a Phase II that found groundwater impact, then the two facts that force it, then the Monday action for integration-risk PMO in a roll-up of three regional service companies.