We just signed a Letter of Intent with a private equity buyer, but the due diligence list looks like a full-time job for my entire leadership team. How do we survive the transition from LOI to close without letting our quarterly performance slip and giving the buyer an excuse to chip our valuation?

Question

Tyler Smith · Accepted Answer

The period between signing a Letter of Intent and closing is the most dangerous phase of any transaction. Buyers look for any operational slip to renegotiate the purchase price. To survive this ninety-day window, you must divide and conquer. Create a strict wall between deal preparation and daily operations. Your leadership team must remain focused on running the business. Keep your weekly Level 10 Meetings sacred. Use your existing EOS Scorecard to spot performance drops before they become trends. If a metric goes red, run it through the IDS process immediately. Do not let deal distraction paralyze your problem-solving. Assign one point person, typically the Chief Financial Officer or an external advisor, to manage the data room and answer the buyer's diligence requests. The rest of your leadership team should focus entirely on hitting their quarterly Rocks. If your revenue or margins dip during diligence, the buyer will argue that your business is unstable and demand a multiple reduction. By maintaining your operational cadence and keeping your team aligned on their daily responsibilities, you prove to the buyer that your business runs on a self-sustaining operating system, not just the heroism of its owner.