The deal closed. The approvals didn't.

Here is an uncomfortable observation from the current consolidation wave: the share purchase agreement transfers the machines, the backlog, the headcount and the lease on the car park – everything except the thing that lets the plant ship. I have lived a version of this. The wire hit on a Friday afternoon. Handshakes, a press release drafted over the weekend, an integration lead already booking flights. Monday at 07:00 the shipping dock went quiet. The Nadcap certificate still named a legal entity that had ceased to exist at close of business Friday, the customer's delegated release had lapsed with it, and finished goods worth seven weeks of output sat in the racks waiting for a signature nobody could legally give. Nothing in the deal model had a line for that. Aerospace dealmaking is accelerating alongside the production ramp – another supplier rolled up most weeks, another aerostructures shop absorbed – and the scene repeats across industrial parks in Europe and North America.

What actually dies at closing

Approvals do not transfer the way fixed assets do. They are granted to a legal entity, at a site, for a scope, and most are quietly conditional on that entity continuing to exist. When the entity changes hands, several things die at once.

• Nadcap and special-process accreditations – welding, NDT, heat treat, chemical processing – tied to the legal entity and the site. Change of ownership triggers a contract review at best, a re-audit at worst, and audit capacity is scarce while the whole industry ramps.
• EN 9100 scope issued in the old company name. A rename needs a reissue; a transfer needs a registrar audit. Harmonise carelessly and the scope narrows by accident – design authority gone because someone tidied a document.
• Customer delegated release and PPAP/FAI signatures – the arrangements that let a supplier ship without customer source inspection – revert to zero. Part number by part number.

The asymmetry is brutal. Notification windows are measured in days – many special-process contracts demand notice within five to fifteen working days, some before the change is even executed – while re-approval is measured in months. I have seen six. I have seen nine. Across two decades in automotive and aerospace quality, AS9100/EN 9100 on one side, IATF 16949 and VDA 6.3 on the other, I have never once seen a ramp pause to wait for a re-audit. Rate does not negotiate with registrars.

You can buy the plant in an afternoon. The right to ship from it is re-earned over months, one signature at a time.

Due diligence prices the backlog, not the approvals

Financial due diligence validates the EBITDA and stress-tests the backlog. Quality due diligence, where it exists at all, skims audit history and open 8Ds over a long lunch. Nobody costs the re-approval gap: re-audit fees, expedite premiums to jump the registrar's queue, reinstated customer source inspection at every receiving dock, containment stock, and the working capital frozen in finished goods nobody can legally release. My working rule after two decades of sites changing hands: budget €400,000 to €1.2 million per manufacturing site for that gap, plus eight to twelve weeks of locked working capital. It deserved a line in the deal model with the same standing as the transaction fees. It got a shrug.

There is a subtler miss, too. Diligence teams treat certificates as binary – valid or expired. Nobody asks the transfer question: what does this approval cost to keep, and what triggers its loss? An EN 9100 certificate with twelve months of validity can be worth less at closing than one with three months left, if the second transfers cleanly and the first is welded to an entity about to be dissolved.

The integration plan quality never gets

Leading quality initiatives across a 2,000+ workforce, multi-site, taught me that approvals survive integration only if they get what every other workstream gets: an owner, a clock and a budget. Three artefacts, each one learned the hard way.

The customer notification matrix comes first: every approval, every customer, who notifies, by when, with what evidence, and who escalates when the reply does not come. My quarter with zero critical customer escalations was not built on charm. It was built on telling customers things before they discovered them. A buyer who notifies in week one is a partner. A buyer who notifies after the customer's receiving inspection finds an unapproved stamp is a problem.

Then custody of the old entity's records. Aerospace retention obligations run to life-of-programme and beyond. When the seller entity is dissolved, who answers the escape investigation in year seven? The purchase agreement should name a records custodian. The quality integration plan should make it operational.

And a configuration freeze: run both QMSs, unchanged and unmerged, until every certificate transfers. Two systems, both ugly, both certified, beat one elegant uncertified one. The classic self-inflicted wound is an integration team harmonising quality manuals mid-ramp while the customer watches the escape rate – changing the plumbing precisely when everyone is checking the water.

Building a QA/QC department for 900+ people from an empty greenfield building taught me what approvals actually are: not paperwork, but earned trust, purchased with years of audits and clean deliveries. That is why I price them like capital. Because they are.

So put a quality leader on the deal team, not the cleanup team. Approvals are the one asset that evaporates at closing, and buyers who understand that stop paying for capacity twice: they discount the price or they schedule the recovery, but they stop pretending the certificates came free with the machines. Certificates turn out to be the only asset on the books that depreciates faster than goodwill – and at least the accountants keep track of the goodwill.