News & Analysis as of

Buyers Earn-Outs Acquisitions

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

Vedder Price

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

Vedder Price on

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

DarrowEverett LLP

How Earnout Provisions Can Supply Great Value for Buyers, Sellers

DarrowEverett LLP on

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

TransPerfect Legal

What’s Trending: Milestone Disputes in Life Sciences Litigation

TransPerfect Legal on

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

Husch Blackwell LLP

Delaware Chancery Court Decisions Outline Important Drafting Points for Earnout Terms in M&A Transactions

Husch Blackwell LLP on

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

Greenbaum, Rowe, Smith & Davis LLP

Earnouts a Complicated but Useful Option in Mergers and Acquisitions

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

White & Case LLP

Notable decisions from Delaware courts

White & Case LLP on

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

McDermott Will & Emery

Mind the Gap: Strategies for Addressing the Valuation Gap in European M&A Deals During and After COVID-19

McDermott Will & Emery on

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

Jackson Walker

Earnouts in M&A Transactions

Jackson Walker on

An “earnout” is a deal mechanism used in a merger and acquisition transaction (“M&A Transaction”) which structures the terms upon which a buyer agrees to pay additional consideration to the seller after the closing of the M&A...more

White and Williams LLP

Delaware Weighs in on Reformation of Contract for Misunderstanding as to Earn-Out

In the recent case of Glidepath Limited v. Beumer Corporation, the Delaware Court of Chancery considered the case of whether a court could apply equitable principles to reform the dates in a purchase contract for measurement...more

Morrison & Foerster LLP

Acquisition Financing in the United States: 2017… Uncertainty!

Global M&A was sluggish in the beginning of 2016, but ended strong with a fourth quarter burst of activity. While aggregate 2016 deal volumes dropped 16% from the highs of 2015, Thomson Reuters reports that 2016 global deal...more

Dechert LLP

Global Private Equity Newsletter - Spring 2017 Edition: Bridging the Consideration Gap

Dechert LLP on

As recently as March 15, 2017 (Financial Times), KPMG explained that total market capacity for M&A will increase by 17% in 2017 as companies continue to pay down debt and bolster cash reserves. As a result, sell-side...more

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