Alternative ways to address cust. concentration, w/o restructuring the deal

searcher profile

November 09, 2024

by a searcher from Baylor University in Chicago, IL, USA

Hi All- I have a deal under contract that has 30% customer concentration on one client. I didn't find out about the customer concentration until several weeks AFTER we began diligence.

I've done the math, and if we lose that one customer we would be at breakeven with our debt service.

Aside from restructuring the deal, what are some ideas for how I could speak to the customer prior to close without spooking them or putting the seller at risk? Are there ways of phrasing an introduction to the customer that would limit the risk for the seller, while giving the buyer more piece of mind? (Note: They've been a consistently large customer for 5+yrs, and the seller does NOT have a close relationship with them)

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commentor profile
Reply by a lender
in Falmouth, MA, USA
Well thought and structured seller note might be the solution. Feel free to ping me.
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Reply by an admin
from Massachusetts Institute of Technology in Portland, OR, USA
^redacted‌ might be able to comment here.
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+1 more reply.
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