An earn-out is a tool for alignment, not just a financial hedge. If a target company is on track to miss its earn-out targets, a savvy acquirer will proactively renegotiate the terms. The long-term value of retaining and motivating the key team members outweighs the short-term financial gain of a missed payment.

Don't wait for a competitor's contract to expire. Elite reps proactively engage accounts months in advance, building an ironclad value proposition. This allows them to close and book the deal before the incumbent is even aware they are at risk, making the renewal a mere formality of cancellation.

Instead of just asking for discounts, ask your major vendors about their internal goals, bonus structures, and objectives. By understanding their needs (e.g., product mix targets), you can help them achieve their goals in exchange for better pricing, rebates, and terms, creating a true win-win.

Viewing TSAs as simple contracts encourages extensions and complacency. Framing them as projects with defined start dates, end dates, and scopes creates the necessary urgency for the acquiring company to build internal capabilities and exit the agreement on time, preventing costly integration debt.

By the time a strategic acquirer enters due diligence, the desire to do the deal is already high. The process's primary purpose is not to hunt for deal-breakers but to confirm key assumptions and, more importantly, to gather the necessary data to build a robust and successful integration plan.

To reassure an acquired company's partners, communicate that their existing investments (like competencies and specializations) will be directly transferred. Describing the program integration as a 'lift and shift' provides concrete assurance that their earned value will not be lost, reducing uncertainty and maintaining trust.

A key part of buy-side M&A is conducting 'reverse diligence,' where the buyer transparently outlines post-close operational changes (e.g., new CRM, org charts). This forces difficult conversations early, testing the seller's cultural fit and willingness to integrate before the deal is finalized.

Palo Alto Networks dedicates the majority of its M&A diligence to co-developing a multi-year product roadmap with the target's team. This ensures full strategic alignment before the deal is signed, avoiding the common failure mode where product visions clash after the acquisition is complete.

Third-party contracts with change-of-control clauses are a major carve-out risk, as vendors may hike prices post-acquisition. To mitigate this, explicitly state in the Letter of Intent (LOI) that your valuation is based on the assumption that key contracts will renew at or near historical costs. This provides critical leverage for future negotiations or price adjustments.