What This Means Pre-signing integration design means deciding how the business will run before the deal signs, and writing it into the terms. Which systems stay. Who reports to whom. What the seller does in month three, not just at the handshake. In many lower mid-market deals, this gets skipped. There's no integration team and no playbook, so the plan defaults to whatever the buyer improvises after close. It also drives price. Earnouts, seller notes and rollover equity all assume the business performs after close. When the plan can't deliver that, the deal has a dispute built into the SPA. Where Deals Go Wrong - The earnout and the integration plan contradict each other: An earnout assuming 15% growth sits badly with a plan that migrates the customer base to new systems in month two. Nobody reconciles the two before signing. The target gets missed, the buyer declines to pay, and the seller argues the miss was caused by the buyer's own integration choices. That argument is expensive, and it was avoidable at signing. - The acquisition type is never decided: A buyer can: (a) absorb the business onto its own systems and team; (b) keep it separate and centralize only the back office; or (c) leave it alone and just set targets while the seller keeps running it. Absorbing makes systems and staff overlap the diligence priority. Leaving it alone makes seller retention and customer relationships the priority. Most LOIs never say which. - Synergy math with nothing behind it: "We'll cross-sell to their customers" is a hope, not the plan. At this size one lost employee or one churned anchor customer wipes out the whole number. A synergy that's in the valuation needs a name, a date and an owner. - The seller's role after close is left vague: In owner-run businesses the seller often is the sales team, the pricing authority and the customer relationship. "Reasonable assistance for 90 days" isn't a plan, it’s a future argument. Real Life Example Alpine Investors launched Apex in 2019 around Best Home Services and Frank Gay Services, two founder-owned Florida contractors. From the launch announcement onward, the model was stated plainly: acquired businesses keep their own brands and leadership, while Apex centralizes recruiting, training, technology, procurement and back office. That clarity is the point. Sellers knew what a deal with Apex meant before they entered one. And because the model was fixed, diligence knew where to spend its hours: not on the back office that was being replaced anyway, but on whether the local leadership, the technicians and the customer relationships would survive the deal. The approach scaled to 75 brands across 46 states and over $3 billion in revenue by 2026, when Apollo took a minority stake. Success Factors - Test the earnout against the integration plan: One question decides it: can the business hit these targets while going through the changes about to be made? If not, one of them is wrong. - Discuss the model during the LOI and document the approach: Fold in, keep separate, or leave alone. One sentence disciplines the diligence and tells the seller what they're agreeing to. - Build the 100-day plan during diligence: Integrate before transforming. Systems, people, customers first. The ERP upgrade may wait for month four. Doing both at once breaks the team the buyer just paid for. - Put the seller's transition in the SPA with specifics: Hours per week, compensation, and term. Vague transition language is the most common source of post-close fights. Share Your Perspective: Have you ever signed a deal where the earnout and the integration plan turned out to be incompatible? Hit reply.