Assess whether a top customer is actually sticky (edaaae)
August 31, 2026 · SmartSolo
Situation
IP diligence counsel's financial counterpart in a family-office reviewing a manufacturing target has one working extract — earnout metric definitions that invite dispute — after a CIM that omitted a material litigation. If earnout metric definitions that invite dispute cannot support a top customer is actually sticky, the honest M&A Due Diligence output is hold.
Decision
IP diligence counsel's financial counterpart in a family-office reviewing a manufacturing target must choose Proceed / Reprice / Walk / Hold using earnout metric definitions that invite dispute after a CIM that omitted a material litigation.
Hypotheses to test
- The population in earnout metric definitions that invite dispute is the one a CIM that omitted a material litigation named, so Proceed follows for this Separation and Integration file.
- The population in earnout metric definitions that invite dispute is adjacent only to a CIM that omitted a material litigation; Reprice is the honest M&A Due Diligence call.
- A family-office reviewing a manufacturing target already contained a CIM that omitted a material litigation before earnout metric definitions that invite dispute arrived; no new Separation and Integration path.
- Provenance on earnout metric definitions that invite dispute after a CIM that omitted a material litigation is broken; do not pick Proceed or Reprice yet.
Analysis required
- Separate a one-off add-back from a recurring earnings issue in earnout metric definitions that invite dispute.
- Map reps, earnout mechanics, and integration risk a family-office reviewing a manufacturing target would inherit.
- Tie quality-of-earnings, working-capital, and contingent items in earnout metric definitions that invite dispute to a top customer is actually sticky.
- For this M&A Due Diligence Separation and Integration file, read earnout metric definitions that invite dispute against a CIM that omitted a material litigation and write the one fact that would move a top customer is actually sticky for IP diligence counsel's financial counterpart.
Recommendation
Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / Separation and Integration packet (earnout metric definitions that invite dispute after a CIM that omitted a material litigation). The follow-on Separation and Integration action is what IP diligence counsel's financial counterpart does next: implement the option, assign an owner, and log the missing fact.
Explore more
More M&A Due Diligence prompts
- Assess whether working capital should be a walk-away (2b21bd)
- Assess whether environmental liability is capped or open-ended (e58b46)
- Assess whether related-party sales should be backed out of valuation (d3180d)
- Assess whether earnout definitions will cause a post-close fight (69494f)
- Assess whether integration costs were sandbagged in the CIM (f6c835)
Explore related decision areas
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