How Transparency and Flexibility Saved the Sale

Introduction

One of the most common reasons M&A deals fall apart is a dip in financial performance. Buyers are continually monitoring results — right up until closing. So what happens when a business misses its numbers late in the process? We are sharing a recent example of how one seller navigated that challenge and preserved the deal through open communication and creative structuring.

The Problem: Missed Numbers, Late in the Game

Osage Advisors was deep into a transaction — legal teams were engaged, documents were nearly finalized, and everyone had already invested heavily. But for three consecutive months, the seller failed to hit revenue targets due to operational bottlenecks, not market weakness.

Buyers took notice. And while they still believed in the business, they needed to address the growing concern — especially because their lenders were involved in financing the deal.

The Pivot: Creative Deal Structuring

Instead of walking away, both sides approached the issue constructively. The buyers didn’t demand a lower purchase price — they simply wanted to reshape how and when that price was paid.

Here’s how the deal evolved:
•Smaller cash payment at close to protect short-term liquidity
•Modified seller note to reflect updated cash flow realities
•Contingent earnout added for 10% of the deal, paid only if profitability goals were met over two years
•Rent adjustment provided further flexibility on buyer cash flow
•Performance catch-up clause allowed full earnout if the two-year total met original targets

This kind of flexibility — from both sides — made it possible to preserve the deal without eroding trust.

Why It Worked: Transparency and Trust

The key wasn’t just smart structuring — it was communication. The seller didn’t hide the missed numbers. They raised the issue early and invited the buyer into the conversation. Because there was trust and alignment from the start, both parties remained committed to finding a solution.

Conclusion

Deals don’t die because of a bad month — they die from bad communication. If you hit a performance bump late in the process:
•Be transparent with your advisors and the buyer
•Focus on solutions, not just numbers
•Trust that the right buyer wants the deal to work too

Creative structures like earnouts, seller notes, and adjusted terms can bridge the gap — but only if everyone’s working from the same set of facts.

Certain Members of Osage Advisors are Registered Representatives of and conduct securities transactions through StillPoint Capital, LLC, Tampa, FL. Osage and StillPoint are not affiliated.

Osage Advisors provides a lot of guidance in the M&A market here on our blog and on our YouTube channel and Podcast.