Expert or Arbitrator? — PE Pathways Podcast
Earn-Out Arrangements – Interview with David Lagasse, Member, Mintz Levin
Earnouts are a form of contingent consideration that the buyer of a business pays to the seller in the period following the acquisition, based on the business achieving various financial metrics related to its performance...more
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
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
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
Earnout provisions are common in life sciences and healthtech mergers and acquisitions, particularly when an acquired company may add significant value after closing. This can occur if the acquired business has a product in...more
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
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
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
Do we value our possessions more just because we own them? Sometimes. Does this association of value apply to businesses? Almost always. The Cost of Risk- Buyers and sellers of a business often find themselves with a...more
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
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
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
Earlier this month, the ACC hosted an illuminating panel presentation on Life Sciences Litigation: A Look at Milestone Disputes & Recent Trends. Panelists included Lauri Mims and Jennifer Huber, both Partners at Keker Van...more
Overview- Earnout provisions give sellers of a company rights to additional consideration if the acquired business achieves certain financial goals or specified milestones post-closing. Earnouts are often used to bridge...more
The purchase price is an integral component of any purchase and sale of an operating business, if not the integral component. As in the purchase and sale of anything, the seller and the buyer often have different opinions...more
Williams: Court of Chancery Finds Poison Pill Unenforceable - In February, the Delaware Court of Chancery held that a shareholder rights plan (a "poison pill") adopted by The Williams Companies, Inc. at the onset of the...more
In a climate where there are so many unknown factors challenging valuation methodologies, we explore a number of mechanisms that European dealmakers may consider during the Coronavirus (COVID-19) pandemic in order to bridge...more
A great deal has been written about the M&A wars, including our prior alerts regarding the issues that arise when a buyer attempts to terminate a deal as a result of a seller material adverse effect (MAE) or the inability of...more
There’s an old saying, probably at some point attributed to Abraham Lincoln or Einstein, that a bridge shows no allegiance to either side. It’s a wonderful metaphor and one that dealmakers would be wise to remember when...more