The buyer's due diligence team is trying to discount our valuation by claiming our customer contracts require written consent to transfer, which could delay our close. How do we structure the deal to prevent this from stalling the timeline?

Question

Tyler Smith · Accepted Answer

A buyer's due diligence team will analyze every customer agreement looking for assignability clauses that require written consent to transfer. If your major customer contracts require consent, the buyer will use this as leverage to demand a price reduction or delay the close, claiming the revenue is at risk. To prevent this, you must proactively manage the transition process. First, audit your contracts early in the process and categorize them by revenue and transferability. For customers that require consent, draft a standard, professional notice letter that positions the transaction as a positive upgrade that will bring more resources and better service. Second, negotiate a pre-closing consent threshold with the buyer. Agree in the definitive agreement that closing is conditioned on obtaining consent from customers representing eighty percent of your revenue, rather than one hundred percent. This prevents a single minor client from holding up the entire deal. Third, use your EOS Accountability Chart to show that your leadership team owns these customer relationships, making the consent process a routine administrative task rather than a renegotiation. Finally, under the IVS 105 Market Approach, prove that customer transition risk is standard in your industry and is already priced into the multiple. By structuring a clear, phased consent plan and securing the buyer's agreement on a realistic revenue threshold, you protect your timeline and maintain your valuation at close.