My Customer Was Acquired. Now What?

The news drops without warning: your customer is being acquired. Cue the questions.

• Will they still pay on time?
• Will credit terms change?
• Will the new owners honor existing agreements?

Mergers and acquisitions (M&A) can bring uncertainty, but they also create opportunities if you know how to handle them. Here is the ultimate guide for navigating customer acquisitions while protecting your receivables and strengthening your credit strategy.

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Step 1: Assess the Acquirer’s Financial Health

Do not assume bigger means better. The acquiring company may look strong on paper, but they could also be taking on heavy debt to complete the deal. That debt could affect how quickly vendors like you get paid.

What to do:

• Request updated financial information on the acquiring company
• Review balance sheets, cash flow, and profitability if available
• Check public filings or credit reports if the acquirer is a public company
• Reassess your credit terms in light of the new entity’s strength or debt load

Pro Tip: Healthy acquirers often mean opportunity. Financially stressed acquirers mean caution.

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Step 2: Understand the Acquisition Structure

Not all acquisitions are structured the same way. The details matter because they affect whether your invoices remain obligations of the new company.

What to do:

• Clarify whether it is an asset deal or stock deal
• Confirm if the acquiring company is assuming all debts and liabilities
• Review the integration plan to understand potential delays in AP or vendor management

Fact: In many asset deals, the new company may not assume old liabilities. If you are not careful, you could be left chasing the wrong entity.

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Step 3: Review the Customer’s Payment Reputation

The acquirer’s finances matter, but so does the track record of the company you have been working with. If the customer had a history of late payments before the acquisition, that risk may continue or worsen during transition.

What to do:

• Analyze the customer’s payment history over the past 12 months
• Watch for sudden slowdowns before the acquisition announcement
• Assess whether external financing or last-ditch efforts were propping up payments

Pro Tip: If you notice a pattern of late payments before the deal, tighten terms or require partial prepayment until the dust settles.

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Step 4: Communicate Early and Often

Silence during M&A transitions creates unnecessary risk. The best defense is proactive communication with both the old customer and the new owner.

What to do:

• Schedule a call or meeting with contacts at both companies
• Ask about payment schedules, vendor management, and whether credit terms will change
• Document all agreements in writing so there is no confusion later

Clear communication reduces surprises and strengthens your position in case disputes arise.

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Step 5: Look for Opportunities, Not Just Risks

Acquisitions do not always mean danger. In some cases, the new parent company is more stable and may bring larger orders or expanded opportunities.

What to do:

• Negotiate for improved terms if the acquirer is financially strong
• Offer early-pay discounts or volume incentives to encourage loyalty
• Position yourself as a trusted partner by highlighting your value to the new entity

Pro Tip: Use acquisitions as a chance to grow the relationship, not just protect it.

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Step 6: Monitor the Transition Period Closely

The months after an acquisition are critical. Systems change, approvals shift, and invoices often get lost. This is where many vendors see payments stall.

What to do:

• Track payments weekly, not monthly, during the transition
• Flag any delays immediately and follow up with both AP and management
• Stay flexible but keep communication open and professional

A few late payments may be normal, but consistent delays are a red flag.

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Step 7: Prepare for Post-Acquisition Surprises

Even with preparation, acquisitions can create challenges. Payment terms may change. Customers may be consolidated. In worst cases, liabilities may not transfer, leaving you exposed.

What to do:

• Assess your exposure across your portfolio to avoid overconcentration risk
• Enforce legal protections such as liens or guarantees if you have them
• Reevaluate whether the new customer relationship still fits your credit policy

If the risk is too high, it may be smarter to reduce exposure or require upfront payment.

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Final Thoughts

When a customer is acquired, it is easy to feel like you are playing catch-up. But with the right approach, you can manage risk while uncovering new opportunities.

Stay proactive, communicate often, and lean on real-time credit monitoring tools like Credit Pulse to track financial health through transitions. The better informed you are, the stronger your position will be.

Bottom line: Mergers and acquisitions do not have to catch you off guard. With the right strategy, you can protect your receivables and turn uncertainty into growth.

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FAQ: Credit Risk in M&A

Do I need to re-approve credit after an acquisition?
Yes. Always reassess terms based on the acquirer’s financials and risk profile.

What happens to unpaid invoices during an acquisition?
It depends on deal structure. In stock deals, liabilities often transfer. In asset deals, they may not.

Can acquisitions improve vendor relationships?
Yes. Stronger acquirers may pay faster, expand purchasing, or negotiate larger contracts.

How can I monitor risk during a transition?
Use continuous monitoring tools like Credit Pulse to track changes in financial health and payment behavior.