Our largest client accounts for eighteen percent of total revenue, and their three-year master services agreement expires right in the middle of our planned sale process. Should we pause our exit until the contract is renewed, or can we go to market during the renewal window?

Question

Tyler Smith · Accepted Answer

Going to market with an un-renewed key contract representing eighteen percent of your revenue creates severe deal risk. Buyers who discover an expiring anchor contract during preliminary diligence will either pause their review, demand an aggressive escrow holdback, or condition their closing on the contract being executed prior to funding. That hands the buyer, and your customer, immense leverage over your transaction.

In most cases, the correct strategic move is to pause your broad market launch by sixty to ninety days and use that time to lock in the renewal. Secure a fresh multi-year commitment with clear terms, price escalators, and standard assignment clauses before buyers review your confidential information memorandum.

However, if your renewal timeline is rigidly fixed and cannot be accelerated, you can use the upcoming renewal as a strategic selection filter rather than a quiet vulnerability:

- Position the contract status transparently in your initial teasers: State clearly that the master agreement is up for renewal and highlight the customer history, tenure, and high renewal probability.
- Require buyer qualification before customer outreach: Never allow a prospective buyer to participate in customer renewal calls until you have a signed Letter of Intent with economic terms fully locked down.
- Use the renewal as an execution milestone: Tie final deal closing to the customer signing the new agreement, ensuring the buyer cannot re-price the business once the contract is secured.

Closing that renewal before exclusivity remains the highest-probability path to protecting your enterprise value and keeping your transaction on schedule.