Vendor Concentration Challenge

by a searcher

1 year ago

Under LOI on a B2B healthcare product company.
After going under LOI, I learned that the vendor contract does not have an end date but can be canceled by either party with a 60-day notice. The vendor's products compromise north of 25% of revenue.

This feels like a substantial risk. What can I do to mitigate the risk before closing the deal?

0 likes
42 views
2 comments

professional

What's the result? Is this still on the table ?

2 weeks ago | like reply | 0 likes

searcher

If you have a seller carry or holdback, you could make it partially contingent on the contract not going away within a certain time period post acquisition (eg: 12 months)

1 year ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Investor seeking Self-Funded Search Deals

Downsides of "buying a job" below 750k+ EBITDA?

Thought piece: Proprietary sourcing methods that delivered 2 acquisitions

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.