Assess whether integration costs were sandbagged in the CIM (69ecc2)

Situation

An earnout based on 'adjusted EBITDA' with no dictionary put QoE add-backs the seller marked 'normalized' in front of integration-risk PMO in a health-system acquiring a specialty practice. This M&A Due Diligence / Separation and Integration close is integration costs were sandbagged from QoE add-backs the seller marked 'normalized', and the live options are Proceed, Reprice, Walk.

Decision

Integration-risk PMO in a health-system acquiring a specialty practice must choose Proceed / Reprice / Walk / Hold using QoE add-backs the seller marked 'normalized' after an earnout based on 'adjusted EBITDA' with no dictionary.

Hypotheses to test

• Authorize Proceed now; QoE add-backs the seller marked 'normalized' already has the discriminator after an earnout based on 'adjusted EBITDA' with no dictionary.
• Keep Reprice in force until QoE add-backs the seller marked 'normalized' is completed after an earnout based on 'adjusted EBITDA' with no dictionary for integration-risk PMO.
• Treat QoE add-backs the seller marked 'normalized' as Walk because both readings appear after an earnout based on 'adjusted EBITDA' with no dictionary.
• Refuse a M&A Due Diligence close: integration-risk PMO does not have the page integration costs were sandbagged turns on in QoE add-backs the seller marked 'normalized'.

Analysis required

• Map reps, earnout mechanics, and integration risk a health-system acquiring a specialty practice would inherit.
• Tie quality-of-earnings, working-capital, and contingent items in QoE add-backs the seller marked 'normalized' to integration costs were sandbagged.
• Name the document integration-risk PMO still needs before signing.
• For this M&A Due Diligence Separation and Integration file, read QoE add-backs the seller marked 'normalized' against an earnout based on 'adjusted EBITDA' with no dictionary 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 / Separation and Integration packet (QoE add-backs the seller marked 'normalized' after an earnout based on 'adjusted EBITDA' with no dictionary). Lead with the M&A Due Diligence option QoE add-backs the seller marked 'normalized' can support after an earnout based on 'adjusted EBITDA' with no dictionary, then the two facts that force it, then the Monday action for integration-risk PMO in a health-system acquiring a specialty practice.