We signed an LOI at an eight-times multiple, but managing the diligence process while running the company is overwhelming our team. How do we prevent our financial performance from dipping between LOI and close and triggering a purchase price re-trade?

Question

Tyler Smith · Accepted Answer

The period between signing an LOI and closing the deal is when transactions die or purchase prices get slashed. The primary reason is operational drift. The owner and leadership team get pulled into data requests, legal calls, and accounting interrogations. As a result, pipeline conversion slows, customer service slips, and the current quarter misses target. Buyers evaluate your trailing twelve-month numbers right up to the signing day. A missed month gives them all the ammunition they need to re-trade the multiple or demand an earnout.

To insulate operations, establish an unbending division of labor using your Accountability Chart. Designate one person, typically the Integrator or outside M&A advisor, as the sole deal lead responsible for answering buyer data requests. The rest of your leadership team must be barred from deal work. Their single job is running the day-to-day business and hitting their quarterly Scorecard targets.

Keep your weekly Level 10 Meeting sacrosanct. Diligence topics should not bleed into your tactical meeting. Use your Level 10 Meeting to identify operational issues (IDS) before they impact monthly revenue. If diligence queries require deeper research, assign them as specific tasks to your transaction advisors rather than your operational department heads. Treat closing as a milestone that only occurs if the core business maintains its trajectory. When a buyer sees strong, steady operational results during exclusivity, their confidence solidifies, closing urgency increases, and their opportunity to re-trade vanishes.