We are in the final weeks before closing and one of our major clients just announced they are putting their contract out for RFP. How do we manage this under our LOI without letting the buyer gut our valuation?

Question

Tyler Smith · Accepted Answer

The period between signing the LOI and closing is highly vulnerable. If a major client puts their contract out for RFP, the buyer will immediately claim a Material Adverse Effect has occurred and try to re-trade the purchase price or walk away. To manage this risk, you must have a clear process to address operational fluctuations. Do not hide the information. Bring it to the buyer immediately, but present it alongside your operational mitigation plan. Use your weekly Level 10 Meeting data and your sales pipeline to show how you will replace that potential revenue gap. You can also propose a structural compromise to keep the deal on track. Suggest carving out the disputed client revenue from the upfront purchase price and structuring it as a targeted earnout or a contingent seller note. If the client renews, you get paid the full amount; if they leave, the price adjusts accordingly. This structure protects the buyer from immediate downside while preserving your opportunity to capture the full valuation. By using your operating system to manage the transition, you show the buyer that your company can handle operational challenges without collapsing.