We are sixty days into due diligence after signing the LOI, and our revenue took a temporary dip because a major project was delayed. The buyer is threatening to use the MAC clause to renegotiate the purchase price. How do we defend our valuation and keep the deal on track?

Question

Tyler Smith · Accepted Answer

A temporary dip in performance during the diligence window is a buyer's favorite excuse to chip away at your valuation. If they bring up a Material Adverse Change or MAC clause, they are testing your resolve and trying to see if you will panic and accept a lower multiple. You must counter this immediately with operational transparency and forward-looking data. Do not get defensive. Instead, pull up your EOS® Scorecard and show them the leading indicators. A delayed project is not a lost project. Prove to the buyer that your sales pipeline remains robust and that your customer retention metrics are completely steady. Use your weekly Level 10 Meeting™ history to show how your leadership team identified the delay, isolated the issue, and successfully rescheduled the milestones. When you can show that the delay was a temporary timing issue rather than a structural decay of your business model, you neutralize the MAC argument. Furthermore, offer a structural solution rather than a price cut. Suggest a short-term, targeted escrow or a minor performance-based adjustment that pays out as soon as the delayed project hits its next milestone. This shifts the focus back to execution and proves you have complete confidence in your operational model. By demonstrating that your business runs on a predictable, systematic process, you show the buyer that a minor timing bump does not justify a permanent discount on your enterprise value.