A strategic buyer is conducting their Quality of Earnings audit and refuses to accept our pro forma EBITDA adjustments for redundant overhead we eliminated last quarter. How do we use our EOS Accountability Chart and operational metrics to validate these cost savings?

Question

Tyler Smith · Accepted Answer

During a strategic acquisition, the buyer is looking to eliminate redundant overhead post-close to increase their overall margins. However, they will fight to keep these savings out of your historical EBITDA calculation so they do not have to pay you for them. You must defend these pro forma adjustments with absolute operational clarity. Use your Accountability Chart to show exactly which roles and expenses are redundant and can be immediately eliminated upon transaction close. If you consolidated your operations or automated delivery processes last quarter, present a clear before-and-after map of your team structure. Back this up with your quarterly performance data and scorecard metrics. Prove that the eliminated overhead did not damage your operational capacity or customer satisfaction. Show that your remaining team has the capacity to handle the current volume without adding cost. If the buyer still resists including these adjustments in your base EBITDA, suggest a structured bridge. You can negotiate a short-term earnout or a contingent payment structure that pays out as soon as those cost savings are realized post-close. By proving that your operational adjustments are real, sustainable, and already reflected in your current run-rate, you force the buyer to recognize the true earnings power of your business.