For many business owners, selling a company feels like a long, disciplined climb. You prepare the business, go to market, negotiate a price, sign a Letter of Intent, and enter due diligence. At that point, it feels reasonable to believe the hard part is over.
That’s often when the buyer comes back.
They want to revisit the price. They want to change structure. They want more seller financing, a larger earnout, or a revised working capital target. This late-stage renegotiation commonly referred to as “re-trading” is one of the most frustrating and costly moments in a sale process.
Re-trading is common. It is also predictable. And in many cases, it is preventable.
What Re-Trading Actually Looks Like in Practice
Re-trading occurs when a buyer attempts to change the economic terms of a deal after an LOI has been signed, typically during exclusivity.
In theory, these changes are tied to new information uncovered in due diligence. In practice, they often appear as incremental adjustments that materially reduce seller proceeds.
Here is how it shows up in real transactions:
- A $20 million agreed purchase price becomes $17 million after “risk adjustments” that are loosely tied to customer concentration, integration costs, or normalized margins issues that were disclosed before the LOI was signed.
- A working capital target initially discussed at $200,000 is redefined during diligence using a different methodology or look-back period, inflating the requirement to $800,000. That difference is effectively a price reduction, even if the headline number remains unchanged.
- Cash at close is quietly reduced through larger escrows, expanded indemnity caps, or newly introduced earnouts that shift risk back to the seller.
None of these changes happen all at once. They are typically introduced as “reasonable refinements.” The cumulative effect can be millions of dollars.
Why Re-Trades Happen: Facts vs. Strategy
There are legitimate reasons for re-trading.
Sometimes diligence reveals issues that were not known or could not reasonably have been identified earlier customer contracts that do not transfer, compliance gaps, revenue recognition problems, or customer behavior that materially differs from what was presented. When these issues are real, quantifiable, and directly tied to cash flow, adjusting the deal can be appropriate.
But not all re-trades are driven by discovery.
Some buyers intentionally submit aggressive offers to secure exclusivity, knowing they will attempt to renegotiate later. Once the seller is off the market and momentum has shifted, leverage changes. Fatigue sets in. Time pressure increases. Alternatives disappear.
At that point, re-trading becomes a tactic rather than a response.
This behavior is far more common with certain buyer profiles than others, and experienced sellers and brokers learn to recognize it early. The mistake sellers make is assuming all LOIs are written with the same intent.
They are not.
Exclusivity Is Where Leverage Shifts
Exclusivity is not a formality. It is the moment leverage moves from the seller to the buyer.
Once a seller agrees not to pursue other offers, the buyer becomes the only path forward. That asymmetry is what allows re-trades to happen. Without alternatives, sellers are forced to decide whether to accept worse terms or restart the process.
This is why re-trades are rarely about a single issue. They are about control.
The Real Cost to Sellers
The financial cost of re-trading is obvious. A few million dollars shaved off the price. More risk pushed into the future. Less cash at close.
The less visible cost is psychological.
By the time re-trades occur, sellers have usually invested months of time, disclosed sensitive information, emotionally committed to the transaction, and begun planning their next chapter. Walking away feels expensive, even when it is rational.
Buyers who re-trade for sport understand this dynamic. They are not relying on superior arguments. They are relying on seller fatigue.
How Sellers Reduce Re-Trade Risk Before Going to Market
The strongest protection against re-trading is not toughness at the negotiating table. It is preparation and process.
Comprehensive, well-built Confidential Information Memoranda (CIMs) matter. A CIM that clearly explains revenue quality, customer concentration, margin drivers, add-backs, working capital behavior, and operational dependencies leaves far less room for “new” discoveries later.
Equally important is maintaining competitive tension.
When buyers know they are not the only option and that other qualified parties remain engaged, re-trading behavior changes dramatically. Buyers who believe a seller will actually walk away are far less likely to test boundaries.
Re-trades for sport thrive in single-buyer processes. They struggle in competitive ones.
How Deal Structure and Process Protect Value
Clear LOIs reduce ambiguity and limit reinterpretation.
Price mechanics, working capital methodology, earnout boundaries, diligence scope, and timelines should be explicit. Ambiguity invites renegotiation. Precision discourages it.
Process discipline also matters. Defined diligence periods, clear deliverables, and firm timelines prevent deals from dragging on, which is when second-guessing and opportunistic re-trades tend to emerge.
When to Push Back and When to Re-Engage
Not every re-trade request should be rejected. Judgment matters.
Sellers should push back when buyers raise issues that were previously disclosed, cannot quantify the impact, or frame concerns in vague terms rather than financial reality.
Renegotiation may be appropriate when genuinely new information emerges that materially affects cash flow or risk. In those cases, narrow, well-defined adjustments preserve the deal without surrendering leverage.
The strongest position, however, is always the willingness to walk away. A deal that no longer reflects fair value is not a successful exit.
The Broker’s Role in Managing Re-Trades
This is where experienced seller-side representation matters most.
A good broker separates facts from tactics, quantifies issues objectively, enforces process discipline, and protects sellers from making emotional decisions under pressure. More importantly, they structure the process in a way that makes opportunistic re-trading unattractive in the first place.
Re-trades do not happen randomly. They happen when process, preparation, or leverage breaks down.
Re-Trading Is Predictable and Often Preventable
Re-trading is part of the M&A landscape. But it does not have to define the outcome of a sale.
Sellers who prepare thoroughly, run competitive processes, and understand how leverage actually works protect both value and peace of mind. The goal is not to eliminate negotiation. It is to prevent unnecessary concessions driven by fatigue, imbalance, or surprise.
Well-run processes don’t eliminate re-trades. They limit them and keep them honest.
