Diligence Workstream Plan

---
name: Diligence Workstream Plan
description: Produces a dependency-mapped sequence for the commercial, financial, operational, legal, tax and IT workstreams against the exclusivity clock, for when you need the findings that invalidate other work to surface before that work is done.
---

# Diligence Workstream Plan

## When to use

Use this skill once the diligence architecture has named the workstreams, owners and deliverables, and exclusivity has a start and an end date. Architecture answers who does what; sequencing answers in what order, and it is the harder question: a tax structuring finding that lands in week six can invalidate three weeks of modelling built on the wrong acquisition entity, and by then there is no float left to rebuild in.

## What it does

Produces a sequenced workplan built on a critical path -- every workstream mapped to the outputs it consumes and the outputs it produces, ordered so that shape-changing findings arrive before the work they would undo, with float, freeze points and a re-baselining trigger stated on the face of the plan.

## Method

### Step 1 -- Fix the terminal dates and run a backward pass

Set exclusivity expiry, signing, IC date, papers circulation and model freeze first, then derive every workstream deadline backwards from model freeze rather than forwards from kick-off. Forward-planned diligence discovers its deadline problem in the last fortnight.

### Step 2 -- Map dependencies as outputs, not topics

Write each link as a producer and a consumer. QoE produces adjusted EBITDA, which the model, the bid and the leverage sizing consume. Tax produces the cash-tax rate and the acquisition structure, which the model and the SPA consume. Commercial produces the growth and exit-multiple support the returns case consumes. **A workstream with no consumer is confirmatory -- ask what you are paying for.**

### Step 3 -- Front-load the invalidators

Separate findings that change a number in the model from findings that change its shape: tax structuring, change-of-control clauses in the top contracts, pension and deferred compensation, carve-out TSA dependencies, licence transferability. Shape-changers are cheap to scope and ruinous to discover late. Schedule them in weeks one and two even where the full workstream runs to week six.

### Step 4 -- Build the critical path and state the float

The critical path is the longest dependency chain to IC papers -- in most deals QoE, then the model, then papers. State the float on every other stream: one carrying more than ten working days of it either starts later or costs less, and both conversations are worth having.

### Step 5 -- Set the freeze point, the reserve, and the re-baselining trigger

After model freeze, any input change needs a named approver and a version note; without one, the number in the IC pack and the number in the bid letter drift apart. Leave roughly 15% of the exclusivity calendar unallocated as re-work reserve, and define in advance what forces a re-baseline: any finding above the materiality threshold that changes a structural input rather than a driver. Deciding that in week one is judgement; in week six it is negotiation under pressure.

### Step 6 -- Require interim read-outs, not final reports

Every workstream reports at a fixed interim date in prose, listing findings above threshold to date. Advisors who hold findings back for the final report are the single largest source of late invalidation.

## Inputs

- Diligence architecture: workstreams, owners, deliverables, advisor scopes
- Exclusivity start and expiry, IC calendar, target signing date
- Returns model structure and its named inputs
- Deal shape: carve-out, secondary, founder-led, platform with add-ons
- Information gap log, current state

## Output format

- Terminal dates and the backward pass in prose
- Dependency map: producer, output, consumer, per link
- Sequenced workstream list with start, interim read-out, delivery and float
- Critical path stated explicitly, plus the two nearest-critical streams
- Freeze point, re-work reserve and re-baselining trigger
- Judgement note on what was front-loaded and why

## Example

**Fictional target: Aldergate Test & Inspection.** QoE EBITDA EUR 31.0m, proposed entry 9.0x, implied EV EUR 279.0m. Exclusivity 56 days: kick-off Day 1, model freeze Day 42, papers Day 45, IC Day 50, signing Day 56.

Tax was scheduled conventionally in weeks five and six. On Day 38 it found a historic transfer-pricing exposure of EUR 4.5m one-off plus EUR 0.9m of recurring EBITDA once intra-group charges are corrected. At 9.0x, EUR 0.9m is EUR 8.1m of EV; with the one-off, EUR 12.6m of price -- 0.41 turns. The model was rebuilt Days 38 to 46, papers slipped to Day 47 and IC to Day 52, leaving four days to signing and no reserve.

That review was a five-day scope. Run in week two it would have produced the same EUR 12.6m before the operating model existed, and the bid would have been struck once. Sequence tax by when its findings invalidate other work, not by when the tax fee is convenient.