Assess whether integration costs were sandbagged in the CIM (5d2131)

Situation

An earnout based on 'adjusted EBITDA' with no dictionary put post-merger systems-integration risk register in front of buy-side QoE lead in a roll-up of three regional service companies. This M&A Due Diligence / People and Contracts close is integration costs were sandbagged from post-merger systems-integration risk register, and the live options are Proceed, Reprice, Walk.

Decision

Buy-side QoE lead in a roll-up of three regional service companies must choose Proceed / Reprice / Walk / Hold using post-merger systems-integration risk register after an earnout based on 'adjusted EBITDA' with no dictionary.

Hypotheses to test

• An earnout based on 'adjusted EBITDA' with no dictionary is noise around an already-controlled People and Contracts process in a roll-up of three regional service companies, given post-merger systems-integration risk register.
• An earnout based on 'adjusted EBITDA' with no dictionary is the event in post-merger systems-integration risk register that forces Proceed for buy-side QoE lead under M&A Due Diligence.
• Post-merger systems-integration risk register shows a one-file miss after an earnout based on 'adjusted EBITDA' with no dictionary, not a People and Contracts program failure.
• Post-merger systems-integration risk register cannot decide integration costs were sandbagged yet after an earnout based on 'adjusted EBITDA' with no dictionary; hold is the only M&A Due Diligence close a roll-up of three regional service companies can defend.

Analysis required

• Separate a one-off add-back from a recurring earnings issue in post-merger systems-integration risk register.
• Map reps, earnout mechanics, and integration risk a roll-up of three regional service companies would inherit.
• Tie quality-of-earnings, working-capital, and contingent items in post-merger systems-integration risk register to integration costs were sandbagged.
• For this M&A Due Diligence People and Contracts file, read post-merger systems-integration risk register against an earnout based on 'adjusted EBITDA' with no dictionary and write the one fact that would move integration costs were sandbagged for buy-side QoE lead.

Recommendation

Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / People and Contracts packet (post-merger systems-integration risk register after an earnout based on 'adjusted EBITDA' with no dictionary). Lead with the M&A Due Diligence option post-merger systems-integration risk register can support after an earnout based on 'adjusted EBITDA' with no dictionary, then the two facts that force it, then the Monday action for buy-side QoE lead in a roll-up of three regional service companies.