Earn-Out Arrangements – Interview with David Lagasse, Member, Mintz Levin
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
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
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
Market Trends: What You Need to Know - As shown in the American Bar Association's Private Target Mergers and Acquisitions Deal Points Studies: Earnout provisions were included in 26% of the deals reported in the 2023...more
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
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
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
Amid rising interest rates, tightening credit markets, geopolitical concerns in Europe and Asia, stubborn inflation and continuing supply chain issues, there is a growing sense of economic uncertainty. This uncertainty will...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
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
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
Market Trends: What You Need to Know - As shown in the American Bar Association's Private Target Mergers and Acquisitions Deal Point Studies: Earnout provisions were included in 27% of the deals reported in the 2019...more
The COVID-19 virus has ushered in unprecedented and challenging times for our country and our global community. From the deeply personal pain and suffering caused by the virus as a health pandemic to behavioral adjustments...more
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
Whenever parties enter into negotiations to buy and sell a target company, one of the first points of discussion is the purchase price. In particular, the purchase price discussion often reflects the amount of cash that will...more
HBMA Holdings LLC v. LSF9 Stardust Holdings LLC, C.A. 12806-VCMR (December 8, 2017) - This decision illustrates the dangers of not following the limited contractual time to file a dispute and instead relying on an...more
Agreements for the sale of privately-held companies often call for part of the purchase price to be paid in the form of an earnout. The earnout provision requires the buyer to pay an additional amount in purchase price after...more