Assess whether working capital should be a walk-away (899f6c)

SITUATION Working-capital peg versus seasonal reality arrived with a TSA that expires before replacement systems exist for carve-out separation lead. That is a M&A Due Diligence People and Contracts decision on working capital should be in a health-system acquiring a specialty practice.

DECISION Carve-out separation lead in a health-system acquiring a specialty practice must choose Proceed / Reprice / Walk / Hold using working-capital peg versus seasonal reality after a TSA that expires before replacement systems exist.

HYPOTHESES TO TEST 1. Authorize Proceed on working capital should be now if working-capital peg versus seasonal reality after a TSA that expires before replacement systems exist already carries the People and Contracts discriminator for carve-out separation lead. 2. Keep Reprice in force until working-capital peg versus seasonal reality is completed after a TSA that expires before replacement systems exist in a health-system acquiring a specialty practice. 3. Treat working-capital peg versus seasonal reality as Walk because both Proceed and Reprice appear after a TSA that expires before replacement systems exist. 4. Carve-out separation lead does not have the decision working capital should be turns on in working-capital peg versus seasonal reality; refuse a M&A Due Diligence close.

ANALYSIS REQUIRED 1. Test whether a TSA that expires before replacement systems exist is a diligence gap, a price chip, or a walk-away. 2. Separate a one-off add-back from a recurring earnings issue in working-capital peg versus seasonal reality. 3. Map reps, earnout mechanics, and integration risk a health-system acquiring a specialty practice would inherit. 4. For this M&A Due Diligence People and Contracts file, read working-capital peg versus seasonal reality against a TSA that expires before replacement systems exist and write the one fact that would move working capital should be for carve-out separation lead.

RECOMMENDATION On this M&A Due Diligence / People and Contracts decision, bind Proceed to working-capital peg versus seasonal reality after a TSA that expires before replacement systems exist: if working-capital peg versus seasonal reality supports it, carve-out separation lead executes Proceed in a health-system acquiring a specialty practice and logs the owner. If working-capital peg versus seasonal reality instead fits Reprice, take that path. Where working-capital peg versus seasonal reality after a TSA that expires before replacement systems exist is silent, carve-out separation lead must do not proceed, reprice, or walk on a quality-of-earnings fact the packet does not carry.

COMMAND RETURNS - Bottom-line M&A Due Diligence option on working capital should be, then the evidence in working-capital peg versus seasonal reality, then the action for carve-out separation lead - Hypothesis scorecard against working-capital peg versus seasonal reality: supported / rejected / untestable - Owner and next date for carve-out separation lead in a health-system acquiring a specialty practice - What changes working capital should be if a TSA that expires before replacement systems exist is later withdrawn