We signed an LOI and are now thirty days into diligence, and the buyer is trying to use a minor customer churn incident to re-trade on our agreed-upon multiple. How do we handle this re-negotiation attempt without blowing up the deal?

Question

Tyler Smith · Accepted Answer

When a buyer tries to re-trade your multiple mid-diligence using a minor operational hiccup as an excuse, you must respond with data, not emotion. Buyers often use this strategy to test your resolve during the high-stress window of exclusivity. Your first step is to isolate the issue. If they point to a customer churn event, use your metrics to prove whether this is a systemic failure or an isolated incident that fits within your normal historical parameters. Bring the issue directly to your Level 10 Meeting™ to IDS® the problem objectively with your leadership team. Once you have the facts, present a clear, quantitative response that demonstrates the financial impact of the event is already baked into your working capital calculations or historical averages. If the buyer insists on a price reduction, offer to shift the disputed value into a performance-based earnout structure rather than taking an upfront cut to your multiple. This protects your headline valuation while showing you have total confidence in the business. If they refuse and continue to demand an unreasonable haircut, you must be prepared to walk away. Let them know you will let the exclusivity window expire and return to market. Often, the threat of losing the deal and forfeiting their diligence expenses will force the buyer to back down.