Deal team only
Human Capital Diligence · Written findings
The people risk inside Project Halyard, priced against your hold.
A data room tells you what a company pays. It does not tell you whether the team can run your plan, who is already halfway out the door, or what the structure will cost to fix in year two. That is this memo.
The one-page read
Elevated. Concentrated in leadership and compliance.
Project Halyard is a healthy business with a people function that never caught up to how fast it was assembled. The risk is not catastrophic and none of it should stop the deal. It is concentrated and specific: two findings you can price before you sign, and three that will run through your hold period whether or not anyone names them. This memo names them.
By dimension
Two of the five findings are quantifiable before you sign and belong in the price or an explicit reserve. Three are execution risk that a value creation plan has to carry. None of it kills the deal. All of it changes the number, or the plan.
The findings
What the data room did not contain.
One person holds the operating memory, and none of it is written down.
The Chief Operating Officer is described by everyone in the business as the reason it runs. That is not a compliment. The routing logic, the vendor relationships and the account knowledge live in one head, and the day that head leaves is priced nowhere in this model. You would be underwriting a continuity you do not actually own.
The compensation structure only works in aggregate.
On a summary slide the bands are coherent. Placed against real people they come apart: compression between managers and their reports in two regions, and a set of off-cycle exceptions that were never meant to become precedent and now are. Every merit cycle makes this more expensive to fix, not less.
The benefits footprint was assembled by acquisition, and nobody has priced the cleanup.
Four carriers, three renewal dates and two philosophies that do not agree. Harmonization is not a line anyone in the target has modeled, and it carries both a hard cost and a goodwill cost with exactly the employees you most want to keep through the transaction.
Classification exposure is concentrated exactly where it is least tolerated.
The contractor population sits disproportionately in California and the UK entity, and internally it is described as the way we have always done it. That phrase is where reserves come from. This one is quantifiable before you sign, and it belongs in the number rather than in a footnote.
Managers were trained to hit a number, not to run a business.
This is the layer your value creation plan runs through, and it is thin. Every initiative you fund lands on it, and right now it would land as an email nobody acts on. It does not surface in diligence as a risk, because it does not surface in diligence at all.
What it reprices
Two findings have an invoice. Three have a plan.
The quantifiable exposure belongs in the purchase price or an explicit reserve. The rest is execution risk. It has no invoice, but it decides whether the value creation plan you are underwriting clears the management layer that has to deliver it.
Classification reserve and compensation true-up. Quantifiable now, and negotiable now.
Benefits consolidation, sequenced so it does not burn goodwill with the people you are keeping.
Key-person continuity and the manager layer. No line item. It carries the thesis or it does not.
None of this kills the deal. All of it changes the number, or the plan.
If you proceed · first ninety days
The order these have to happen in.
Lock the key person first, in week one, before the announcement. A retention agreement and a documentation sprint on the COO, so continuity is something you own rather than something you hope for.
Settle classification with counsel before close. Reclassify the clear cases, reserve the rest explicitly, and take the number into the negotiation rather than into a footnote.
Design the compensation re-architecture now, land it before the first merit cycle. Bands built from grade logic, not a survey median that flatters everybody, sequenced so the fix gets cheaper instead of more expensive.
Roadmap benefits harmonization across year one. Communicated once and clearly, sequenced away from day one, priced before anyone renews on autopilot.
Name manager capability as a value-creation workstream with an owner. Not left to HR, not left to a policy. The layer every funded initiative has to survive.