Assess whether working capital should be a walk-away from carve-out

SITUATION Environmental diligence manager in a health-system acquiring a specialty practice has one working extract — carve-out stranded-cost model — after a CIM that omitted a material litigation. If carve-out stranded-cost model cannot support working capital should be, the only defensible M&A Due Diligence output is hold.

DECISION Environmental diligence manager in a health-system acquiring a specialty practice must choose Proceed / Reprice / Walk / Hold using carve-out stranded-cost model after a CIM that omitted a material litigation.

HYPOTHESES TO TEST 1. Authorize Proceed now; carve-out stranded-cost model already has the discriminator after a CIM that omitted a material litigation. 2. Keep Reprice in force until carve-out stranded-cost model is completed after a CIM that omitted a material litigation for environmental diligence manager. 3. Treat carve-out stranded-cost model as Walk because both readings appear after a CIM that omitted a material litigation. 4. Refuse a M&A Due Diligence close: environmental diligence manager does not have the decision working capital should be turns on in carve-out stranded-cost model.

ANALYSIS REQUIRED 1. Map reps, earnout mechanics, and integration risk a health-system acquiring a specialty practice would inherit. 2. Tie quality-of-earnings, working-capital, and contingent items in carve-out stranded-cost model to working capital should be. 3. Name the document environmental diligence manager still needs before signing. 4. For this M&A Due Diligence Earnings and Revenue Quality file, read carve-out stranded-cost model against a CIM that omitted a material litigation and write the one fact that would move working capital should be for environmental diligence manager.

RECOMMENDATION Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / Earnings and Revenue Quality packet (carve-out stranded-cost model after a CIM that omitted a material litigation). If carve-out stranded-cost model cannot force a M&A Due Diligence label under Earnings and Revenue Quality, stop. Do not invent missing evidence a health-system acquiring a specialty practice does not have.

COMMAND RETURNS - Bottom-line M&A Due Diligence option on working capital should be, then the evidence in carve-out stranded-cost model, then the action for environmental diligence manager - Hypothesis scorecard against carve-out stranded-cost model: supported / rejected / untestable - Regulatory or exam hook Earnings and Revenue Quality would cite - Earnings and Revenue Quality finding in carve-out stranded-cost model that a second reviewer can re-perform