Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
How Sourcing Agents Hide Bad Debt in Mergers
Most operators assume due diligence catches all liabilities. But a specific class of hidden risk exists outside the standard legal and financial reviews: third-party sourcing agent kickbacks and off-book vendor rebates. This episode examines how these informal arrangements distort cost structures, inflate margins artificially, and create sudden cash-flow shocks when leadership changes. We look at the mechanics of contingent commission agreements in supply chains and why traditional audit trails often miss them entirely. The case study focuses on a mid-market industrial distributor where a…
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