News & Analysis as of

Earn-Outs Acquisitions

Whiteford

Private Company M&A - Reverse Diligence: Questions Sellers Should Ask of Bidders

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When selling a private company, Sellers understandably focus on providing bidders with a comprehensive data room packed with detailed documents and information about every aspect of their business. They expect bidders to pore...more

Herbert Smith Freehills Kramer

Earnout structures: Bridging valuation gaps in M&A – beware the tax complexity

With an observable increase in the use of earnout and contingent consideration structures in M&A, it is timely to consider the related tax complexity. In brief Our recent Private M&A Report highlights a rise in the use of...more

Proskauer - The Capital Commitment

Navigating Earn-Out Disputes: Key Considerations for Private Funds

Times of economic volatility often increase disparities between a seller’s valuation and the buyer’s valuation of the same company. Earn-out provisions are one tool frequently used to address such disparities. An earn-out...more

Troutman Pepper Locke

Expert or Arbitrator? — PE Pathways Podcast

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In this episode of PE Pathways, Partners Nick Stawasz and Dan Boland discuss the distinctions between engaging an expert or an arbitrator for resolving post-closing purchase price and earnout disputes in M&A deals. The...more

Foley & Lardner LLP

Lost in Translation: Key Deal Points in European vs. U.S. M&A Transactions

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After two decades practicing law in Silicon Valley and five formative years working on cross-border deals in Europe, I’ve come to appreciate the subtle (and not-so-subtle) differences in how merger and acquisition (M&A)...more

Bennett Jones LLP

ONSC Denies Claim for Acceleration of Earn-Out Payment

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The Ontario Superior Court of Justice recently released its decision in Project Freeway Inc. v ABC Technologies Inc. (2025 ONSC 1048), addressing whether certain post-closing transactions triggered the acceleration of an...more

Mintz

Seller Considerations When Negotiating a Letter of Intent

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Negotiating and signing a Letter of Intent (LOI) is a key inflection point in the process of selling your business. Buyers and sellers both want the LOI to ensure a base level of understanding on certain key terms such as...more

Whiteford

Private Company M&A - Earn-Outs: Gravy on Top?

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Periodically, particularly during economic downturns or times of market uncertainty, the private M&A market experiences a significant increase in the use of earnouts. As was the case following the Great Recession and the...more

Morrison & Foerster LLP

2024 M&A Annual Review

Our M&A team is honored to have represented clients in some of the most compelling transactions in 2024, from advising the iconic rock band KISS and its co-founders Gene Simmons and Paul Stanley in the sale of all assets...more

Hogan Lovells

Trifecta v. WCG: Delaware considers whether extra-contractual promises can support fraud claim

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In Trifecta Multimedia Holdings v. WCG Clinical Services, the Delaware Court of Chancery analyzed claims related to an M&A transaction involving an earn-out component. Earn-outs are a common feature of M&A transactions and...more

Clark Hill PLC

Navigating the Dynamic M&A Landscape in the Sports Apparel Industry

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The mergers and acquisitions (M&A) landscape in the sports industry has remained notably active and attractive to investors, driven by continuous digital transformation and global franchise investments. Since 1985, the sports...more

Womble Bond Dickinson

Earnout Deals Surge in Uncertain Times – What M&A Professionals Need to Know About Earnouts

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The M&A market has witnessed a major increase in the use of earnout deal terms after 2021. The number of deals with earnout provisions jumped from around 20% in 2021 to 33% in 2023....more

Goodwin

Life Sciences Licensing and M&A Update: Catching Up on Recent Decisions Affecting Commercially Reasonable Efforts Definitions and...

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Recently, the Delaware Chancery Court and the Third Circuit issued three significant decisions on key issues affecting licensing and M&A transactions in the life sciences industry....more

Knobbe Martens

Getinge Acquires Paragonix Technologies

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Getinge, a Swedish public limited company, announced on September 11, 2024 that it completed acquisition of Paragonix Technologies, Inc., a U.S. company specializing in organ transport products and services. According to...more

Benesch

Earnout Held to Violate NY Fee Splitting Prohibition

Benesch on

A pivotal decision by a New York Appellate Division court holding that earnouts based on the future revenue of a dental practice violated the NY Fee Splitting Prohibition could substantially impact the structuring of health...more

Barnea Jaffa Lande & Co.

Conditional Payment (Earn-Out)

In merger and acquisition (M&A) transactions, the earn-out mechanism serves as a strategic tool for conditional payment based on the prospective performance of the acquired entity. This mechanism is particularly prevalent in...more

Mintz - Bankruptcy & Restructuring Viewpoints

In re Weinstein and Mallinckrodt: Implications for Royalty Financings, M&A Earn-Outs, and Other Transactions Involving Future...

Deal structure matters, particularly in bankruptcy. The Third Circuit recently ruled that a creditor’s right to future royalty payments in a non-executory contract could be discharged in the counterparty-debtor’s bankruptcy....more

Vedder Price

Earnouts Back on the Rise in M&A Transactions: What Purchasers, Sellers and Lenders Need to Know

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The pace of earnouts accelerates in M&A transactions whenever market conditions create a value gap between seller price expectations and buyer confidence levels. Earnouts are most common when the volume of merger and...more

Latham & Watkins LLP

Beyond the Valuation Gap - Flexing Earnouts in the Current M&A Environment

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Increased use of earnouts is likely to facilitate M&A deals across sectors in Europe. Earnouts are increasingly common in European M&A. The growing prevalence of this contractual provision — in which additional...more

Goodwin

The growing importance of earnouts in midmarket dealmaking

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A flexible provision raises questions for buyers and sellers alike. Given the uncertain economic climate of 2023, parties are increasingly turning to earnouts to bridge valuation gaps. As shown by Goodwin’s Private Equity...more

DarrowEverett LLP

How Earnout Provisions Can Supply Great Value for Buyers, Sellers

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Earnout provisions can be an effective tool for addressing the potential disconnect between a seller’s expectations and a buyer’s ability to pay when negotiating a business combination transaction. Earnout provisions, or...more

Morgan Lewis - Power & Pipes

Real-World Litigation Impacts of Contract Clauses in Energy Contracts: Some of the Dangers of Earnout Provisions

An earnout provision in mergers and acquisitions contracts entitles the seller of the target company to additional compensation in the future if the target performs well after closing. Such a provision is often used when a...more

J.S. Held

[Webinar] Post-Merger & Acquisition Dispute Resolution - December 7th, 12:30 pm - 1:30 pm EST

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Global Investigations expert Frank Lazzara, CPA, CFF, ABV, CFE, and Economic Damages & Valuations expert David Golbahar, CPA, CFF, CGMA, will present a one-hour* course, which will cover: - An overview of purchase price...more

K&L Gates LLP

Litigation Minute: Earn-Out Provisions (Deal Litigation Series: Part Two of Four)

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What You Need to Know in a Minute or Less - An earn-out provision is a common provision in an acquisition agreement that makes a portion of the purchase price contingent on satisfaction of certain post-closing targets or...more

Moritt Hock & Hamroff LLP

The Succession Bulletin - September 2022

This quarterly newsletter explores the emerging legal topics related to business succession planning. Thought-leading attorneys from Moritt Hock & Hamroff’s Closely-Held/Family Business Practice Group share their legal...more

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