Market Trends 2021/2022: Earn-outs in Public-Private Deals

Earn-outs are a useful tool when transaction parties do not agree on the value of the target company. An earn-out is a compromise that makes a portion of the purchase price contingent on performance of the target business post-closing. Earn-outs are deal-specific, and the terms are customized by the parties—the duration of the earn-out period, the metrics or milestones, the earn-out amount, and acceleration triggers will vary significantly among deals. Explore some of the market trends in earn-outs in deals involving publicly held acquirers and privately held targets during 2021 and the first half of 2022.

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