We signed an LOI sixty days ago, and the buyer is dragging out the diligence process while making continuous, minor data requests. We suspect they are trying to run out the exclusivity clock to retrade our valuation. How do we regain control of the transaction timeline and force a decision?

Question

Tyler Smith · Accepted Answer

When a buyer drags out diligence, they are trying to exhaust your leadership team and erode your leverage. As the exclusivity expiration date approaches, they know you will be highly motivated to close, making you vulnerable to a late stage price reduction. To break this cycle, you must treat the transaction timeline with the same operational rigor you apply to your weekly Rocks. First, establish a hard boundary. Instruct your transaction advisor to issue a formal request for a weekly milestone tracker. Map out the remaining diligence items, legal drafts, and third party approvals on a visual timeline. If the buyer fails to meet these weekly deadlines, notify them that you will not extend the exclusivity period under any circumstances. This immediately shifts the pressure back to their deal team. Second, use your internal operational meetings to manage the flow. Keep your leadership team focused on running the day to day business so your weekly scorecard metrics do not slip. If the buyer sees your revenue and margins remain steady or increase during diligence, they lose their primary excuse for retrading the price. Finally, prepare your team to walk away. If the exclusivity period expires and the buyer attempts to negotiate a lower multiple without a legitimate, newly discovered risk, terminate the negotiations immediately. Having a clear, pre determined walk away price gives your team the confidence to stand firm. Often, the credible threat of walking away is the exact catalyst needed to force a dragging buyer to finalize the purchase agreement and close the deal.