A premium offer for two weeks of exclusivity, before diligence had started

The situation

The call came in on a Tuesday afternoon, and Mohamud did most of the talking, with Iryna filling in numbers when he paused. He explained, through a mix of English and the occasional word Iryna translated, that the three of them had built something over nine years that had started as almost nothing. Mohamud had driven for a rideshare app while he learned the property maintenance trade on weekends. Mykola ran a landscaping crew out of a single truck. Somewhere around year four the two businesses merged, Iryna came on to run the books, and by the time they called our office the combined company was clearing several million dollars a year servicing commercial properties across the North.

They had their eye on a smaller competitor, a company that handled snow removal and grounds maintenance contracts for a cluster of apartment buildings and a regional shopping plaza. No broker was involved. The seller's son had reached out directly to Mykola at a supplier trade show, and the conversation had moved quickly from there.

Mohamud's English was serviceable for day-to-day operations but not for the density of a purchase agreement, and he said so plainly on that first call, without embarrassment. He wanted everything explained twice, once in plain terms and once in writing he could take away and read slowly. That request shaped how we ran the file from the first meeting onward.

The deal itself was modest by the standards of a big-city acquisition, somewhere in the three to eight million dollar range depending on how the equipment and contracts were valued. But modest did not mean simple. The seller had already sent over a one-page term sheet, and buried in the second paragraph was a request that would have committed Mohamud, Iryna and Mykola to a number before they had seen a single financial statement.

Mykola had done most of the early scouting on the target company, walking the equipment yard on a pretext visit and quietly asking around about the crew's reputation among the apartment managers they served. What he came back with was encouraging: steady contracts, reasonably maintained trucks and plows, and an owner who seemed genuinely ready to retire rather than shop the business around for years the way some sellers do. That impression, formed before any lawyer was in the room, was part of why the three of them were inclined to move quickly once the term sheet arrived. It is a common pattern in a first acquisition, where enthusiasm about the target outpaces caution about the process, and it was the first thing we had to separate out on that first call.

The problem

The seller's term sheet asked for two things bundled together. First, an exclusivity period of fourteen days, during which the buyers could not talk to any other target and the seller could not talk to any other buyer. Second, a valuation set at a premium to what the seller described as 'market,' offered in exchange for that exclusivity. The pitch, relayed through the son, was straightforward: agree to the premium now, and you get a clean run at the deal with no competing bidders.

On its face this looked like a reasonable trade. Exclusivity has real value to a buyer, since it stops a seller from shopping the price up once diligence has started. The trouble was the order of operations. The seller wanted the premium locked in before diligence, not after. Mohamud, Iryna and Mykola had seen the target's equipment and knew the contracts by reputation, but they had not seen a tax return, a customer contract list, or an equipment maintenance log. Agreeing to a premium price at that stage would have meant paying for a business they had not yet verified, with only the seller's word standing behind the numbers.

There was a second layer to the risk. The fourteen-day clock started the moment the term sheet was signed, not the moment diligence materials arrived. If the seller was slow producing records, and small operators often are, the exclusivity window could burn down to nothing before the buyers had anything meaningful to review, leaving them either to walk away from a relationship they had invested time in or to extend on the seller's terms.

None of this was unusual or improper on the seller's part. It is a common opening move in an off-market, bilateral deal, where there is no broker running a structured process and no competing bids keeping either side honest. The danger is not that the tactic is unfair, it is that a buyer moving quickly on a first acquisition, eager to close, can agree to it without noticing what they have given up.

There was also a smaller but real concern about how the request had been communicated. The seller's son, not the seller himself, had drafted and sent the term sheet, and it was not clear from the document alone whether the seller had actually agreed to every term in it or whether his son was negotiating ahead of him. Signing an agreement that bound Mohamud, Iryna and Mykola to a fourteen-day exclusivity commitment against a party whose own authority to grant that exclusivity was uncertain would have left the buyers exposed on both sides, obligated without a matching obligation coming back.

What we did

1. Slowed the file down before anything was signed. We told the three of them, in the plain-language pass Mohamud had asked for, that no document needed to be returned to the seller that week. The urgency in the term sheet was the seller's, not theirs, and the first job was separating a genuinely time-sensitive opportunity from a deadline someone else had invented.
2. Arranged interpretation support for every substantive meeting. Rather than relying on Iryna to translate on the fly during calls where terms were actually being negotiated, we brought in a qualified interpreter for the meetings that mattered, so Mohamud's agreement was informed agreement, not a nod along to a summary. Every draft going to him also came with a plain-language cover memo he could read at his own pace.
3. Rewrote the exclusivity clause to run from delivery of materials, not from signing. We proposed a fourteen-day window that started the day the seller produced a defined set of financial and contract records, not the day the term sheet was signed. This meant a slow seller could not quietly consume the buyers' exclusivity before diligence had a chance to begin.
4. Separated exclusivity from price. We advised against agreeing to any specific valuation, premium or otherwise, until diligence had been done. Instead, exclusivity was offered on its own terms, with price to be confirmed once the numbers were verified, rather than baked in as the cost of getting a clean look. This kept the buyers from paying, in effect, for the privilege of finding out what they were actually buying.
5. Built a staged diligence checklist scoped to a business this size. Rather than a sprawling request list built for a much larger deal, we prepared a focused checklist covering the equipment schedule, the major contracts, payroll obligations for the crew, and two years of financial records, sized to what a company of this scale would reasonably be expected to produce.
6. Flagged the contract concentration risk early. A large share of the target's revenue sat in two large property management contracts. We advised the buyers to confirm, before any final price was agreed, whether those contracts would survive a change of ownership or required consent, since losing either one would materially change what the business was worth and turn a fair price into an overpayment almost overnight.
7. Held the line when the seller pushed back. When the seller's son objected to decoupling price from exclusivity, we prepared a short written explanation the buyers could send in their own name, framing the request as standard practice rather than a sign of hesitation, which kept the relationship intact while holding the position. Sending it in Mohamud's own voice, rather than as a lawyer's letter, kept the tone collaborative at a stage where the deal still depended on goodwill.
8. Confirmed the seller's actual authority before relying on the term sheet. Because the document had come from the seller's son rather than the seller directly, we asked for written confirmation that the seller had authorized the terms being proposed, closing the gap that could otherwise have left the buyers bound to an exclusivity commitment the seller himself had never actually agreed to. Getting that in writing early meant the whole negotiation rested on an obligation both sides genuinely owed each other.

The outcome

The seller agreed to the revised terms within a few days. Exclusivity ran fourteen days from the delivery of the diligence package, and no valuation was locked in ahead of that review. When the financial records arrived, they were broadly consistent with what the seller had represented, though one of the two large contracts turned out to require the property manager's written consent to assign, something the original term sheet had not mentioned.

That detail alone would have been worth catching regardless of price. Because it surfaced during diligence rather than after closing, the buyers were able to make consent a condition of the deal rather than a surprise afterward. The final price landed close to, but below, the premium the seller had originally asked for on day one, reflecting the contract risk and a modest adjustment for older equipment that diligence turned up.

Nothing about this outcome makes for a dramatic story. No fraud was uncovered, no deal collapsed at the last minute. That is the point of prevention work: the file is unremarkable precisely because the risk was addressed before it became a problem. Mohamud, Iryna and Mykola closed on a business they had verified, at a price they had tested, with a document trail Mohamud had been able to read and understand at every stage rather than sign on trust.

The seller's authority to grant exclusivity, once confirmed in writing, turned out not to be an issue at all; the seller had simply left the drafting to his son and was comfortable with the substance throughout. That confirmation cost the file a few days early on and nothing more, which is a fair trade against the alternative of discovering an authority gap only after a dispute made it matter.

Mohamud raised the original premium request again himself, near the end of the file, mostly out of curiosity about what it would have cost them. Based on the equipment condition and the assignable-contract issue that diligence uncovered, the number he had almost agreed to on that first call would have overpaid for the business by a meaningful margin, money that would have simply been gone rather than reflected in anything the buyers received. He did not need us to point that out; by the time the deal closed, he could see it in the numbers himself.

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