27 Jul 2021
Show Me the Moolah Doula: Market Trends in M&A Earn-Outs
In an uncertain market, or any M&A transaction where the parties disagree on the value of the target company, the success of the deal may depend on making a meaningful portion of the purchase price contingent on the target’s future achievements. Earn-out provisions, structured as a contingent portion of the purchase price, bridge the gap in valuation between the buyer and seller. Parties should structure earn-out provisions carefully, no matter the economic environment, but the ongoing effects of the pandemic have raised the stakes. Learn more about earn-out provisions and earn-out trends from recent M&A transactions.
Related Content
- Earn-Out Clauses
Understand the benefits and drawbacks of an earn-out clause, and whether it’s right for your client. - Earn-Out Clause
Use this template clause when drafting an earn-out based on milestone achievements measured by net income, revenue, or EBITDA. - Consideration in an M&A Deal
Get an overview of various forms of consideration, including earn-outs, in M&A transactions.
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