News & Analysis as of

Buyers Purchase Agreement Earn-Outs

Womble Bond Dickinson

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

Womble Bond Dickinson on

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

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

Tonkon Torp LLP

You’re Not the Boss Anymore

Tonkon Torp LLP on

It’s nice to get paid. Giving up control of your business? Well… that’s a different story. On closing the sale of a business, owners realize a dramatic financial return on their investment. However, few buyers are willing to...more

Venable LLP

Earnouts and Their Tax Treatment

Venable LLP on

As buyers and sellers engage in negotiations for the sale of a business, often there may be disagreements as to the value and expected growth of that business. One party might currently value the business higher than the...more

Hogan Lovells

Buyer obligations in earnout negotiations

Hogan Lovells on

Previously in our series, our team evaluated a number of important points that buyers should consider when embarking on a build-to-buy transaction to protect against downside scenarios in those collaboration arrangements....more

Fox Rothschild LLP

Understanding the Differences in the Enforcement of Arbitration Awards and Expert Determinations

Fox Rothschild LLP on

Is there a difference in enforcement between an arbitration award and an expert determination pursuant to a contract? The answer is yes, according to a recent ruling by the 3rd Circuit U.S. Court of Appeals that includes...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

Rivkin Radler LLP

The Earnout: Contingent Purchase Price or Compensation?

Rivkin Radler LLP on

A More Cautious Approach- Compared to the torrid pace of M&A transactions last year, the current year seems rather pedestrian. That is not to say businesses are not being sold; they are....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

Farrell Fritz, P.C.

The Earnout in Sales Transactions

Farrell Fritz, P.C. on

What’s the Purchase Price? If you advise me that you are selling your business for $32,000,000 and that $5,000,000 of the $32,000,000 will be paid through an earnout, my response to you is that you are selling your...more

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