November 23, 2020 at 3:13 pm
#38152
William Paquin
Participant
I have always stayed away from earn-outs on EBITDA for the reasons that you highlight and instead have based earn-outs on revenue. In some cases, we provided for an annual minimum payment to protect the seller from general economic conditions greatly diminishing the payout and getting them more comfortable with a “worst case” scenario.