Assess whether working capital should be a walk-away after a TSA that expires

SITUATION Commercial-diligence partner in a strategic buyer looking at a carve-out from a conglomerate has one working extract — QoE add-backs the seller marked 'normalized' — after a TSA that expires before replacement systems exist. If QoE add-backs the seller marked 'normalized' cannot support working capital should be, the only defensible M&A Due Diligence output is hold.

DECISION Commercial-diligence partner in a strategic buyer looking at a carve-out from a conglomerate must choose Proceed / Reprice / Walk / Hold using QoE add-backs the seller marked 'normalized' after a TSA that expires before replacement systems exist.

HYPOTHESES TO TEST 1. Commercial-diligence partner can defend Proceed from QoE add-backs the seller marked 'normalized' after a TSA that expires before replacement systems exist in a M&A Due Diligence challenge. 2. Commercial-diligence partner cannot defend Proceed from QoE add-backs the seller marked 'normalized'; Reprice is what the extract actually supports after a TSA that expires before replacement systems exist. 3. A TSA that expires before replacement systems exist never reached the population in QoE add-backs the seller marked 'normalized' — reopen intake, do not close working capital should be. 4. Two facts in QoE add-backs the seller marked 'normalized' after a TSA that expires before replacement systems exist conflict for commercial-diligence partner; hold this People and Contracts file.

ANALYSIS REQUIRED 1. Separate a one-off add-back from a recurring earnings issue in QoE add-backs the seller marked 'normalized'. 2. Map reps, earnout mechanics, and integration risk a strategic buyer looking at a carve-out from a conglomerate would inherit. 3. Tie quality-of-earnings, working-capital, and contingent items in QoE add-backs the seller marked 'normalized' to working capital should be. 4. For this M&A Due Diligence People and Contracts file, read QoE add-backs the seller marked 'normalized' against a TSA that expires before replacement systems exist and write the one fact that would move working capital should be for commercial-diligence partner.

RECOMMENDATION Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / People and Contracts packet (QoE add-backs the seller marked 'normalized' after a TSA that expires before replacement systems exist). Lead with the M&A Due Diligence option QoE add-backs the seller marked 'normalized' can support after a TSA that expires before replacement systems exist, then the two facts that force it, then the Monday action for commercial-diligence partner in a strategic buyer looking at a carve-out from a conglomerate.

COMMAND RETURNS - Bottom-line M&A Due Diligence option on working capital should be, then the evidence in QoE add-backs the seller marked 'normalized', then the action for commercial-diligence partner - Hypothesis scorecard against QoE add-backs the seller marked 'normalized': supported / rejected / untestable - Missing page in QoE add-backs the seller marked 'normalized' after a TSA that expires before replacement systems exist, if any - Regulatory or exam hook People and Contracts would cite