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Strategic Earn-Out Structures: Balancing Immediate Gains and Deferred Risks in M&A

May 28, 2025 (2 min read)

In today’s M&A landscape, earn-out arrangements offer a way to link a portion of the deal’s value to future performance, benefiting both buyers and sellers. However, without clearly defined metrics and robust dispute resolution measures, these provisions can lead to contentious post-closing conflicts. It’s essential for legal professionals to fully understand these earn-out parameters and the distinct responsibilities of each party before drafting or negotiating their next transaction. Utilize this chart to successfully negotiate an earn-out provision for your next deal.

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