USA Business Acquisition and Revenue Recognition

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A key customer that we have a LTA contract with wants us to acquire another supplier of theirs which at present is a facility owned by a large public company. The cost to acquire the supplier is ~$1M. Currently the supplier is break-even to slightly negative from a profit perspective. To compensate for this and encourage the acquisition, our customer is offering us a 25% price markup for 3 yrs on all parts they sell and will prepay $3M of the markup upfront. In essence, the customer is paying us $3M and the cost of the business if $1M so we are profiting $2M by the transaction.

Separately, our customer was well short on volume commitments on a separate program under the LTA and as a result, our company incurred significant losses from lost absorption coverage, upfront tooling costs, etc. The LTA has a good faith clause that says that customer and supplier will negotiate a mutually agreeable solution. They have acknowledged our loss and are willing to offer a prepayment of $4M for future sales on this program but don't want to mention that it is a repayment for past losses.

We are trying to word the LTA amendment with our customer to allow for some revenue recognition up front rather than deferring the $3M and recognizing as acquired business delivers parts over 3 yrs. Does anyone have idea on how this might be justifiable from a GAAP perspective? We are trying to word the amendment to tie in as repayment of previous losses to allow for earlier recognition.
 
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Specifically, would there be an argument that acquiring the business on behalf of our customer is a separate performance obligation?
 

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