Assess whether integration costs were sandbagged in the CIM (f98ca8)

Situation

After a TSA that expires before replacement systems exist, related-party revenue that disappears at close is what environmental diligence manager can touch in a roll-up of three regional service companies. M&A Due Diligence will live with Proceed versus Reprice on this Separation and Integration file.

Decision

Environmental diligence manager in a roll-up of three regional service companies must choose Proceed / Reprice / Walk / Hold using related-party revenue that disappears at close after a TSA that expires before replacement systems exist.

Hypotheses to test

• Related-party revenue that disappears at close reads as Proceed once a TSA that expires before replacement systems exist is lined up to the same M&A Due Diligence population.
• Related-party revenue that disappears at close is closer to Reprice after a TSA that expires before replacement systems exist; Proceed would over-claim this Separation and Integration extract.
• Walk is still live in related-party revenue that disappears at close for environmental diligence manager in a roll-up of three regional service companies.
• Related-party revenue that disappears at close is missing the fact environmental diligence manager needs after a TSA that expires before replacement systems exist; stop this M&A Due Diligence close.

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 related-party revenue that disappears at close.
• Map reps, earnout mechanics, and integration risk a roll-up of three regional service companies would inherit.
• For this M&A Due Diligence Separation and Integration file, read related-party revenue that disappears at close against a TSA that expires before replacement systems exist and write the one fact that would move integration costs were sandbagged for environmental diligence manager.

Recommendation

Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / Separation and Integration packet (related-party revenue that disappears at close after a TSA that expires before replacement systems exist). The follow-on Separation and Integration action is what environmental diligence manager does next: implement the option, assign an owner, and log the missing fact.