- This topic has 2 replies, 3 voices, and was last updated 2 weeks, 6 days ago by .
Viewing 3 posts - 1 through 3 (of 3 total)
Viewing 3 posts - 1 through 3 (of 3 total)
- You must be logged in to reply to this topic.
Are earn-outs becoming more important in M&A transactions to bridge the valuation gap in the current economic climate? Are they effective tools to get deals closed or just risky creating potential future disputes?
The effectiveness of earn-outs largely depends on clear, well-defined terms and strong communication between the parties to minimize conflicts and ensure successful integration. In my experience the complexity of the earn-out deal could lead to the deal failure. Especially if the seller lacks experience or understanding of the earn-out structure, there may be a misalignment in expectations regarding how performance metrics are measured and how payments are calculated.
It depends on the circumstances for sure – I think earn-outs are helpful if you feel you are overpaying for the company and want to guarantee the future value of the business. I am currently working on an acquisition where we want the owner to retire/leave at closing and we feel we are paying a fair price, so we aren’t interested in an earn-out that would require him to stick around.
Trainings
Cookie | Duration | Description |
---|---|---|
cookielawinfo-checkbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checkbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |
In order to become a charterholder you need to complete one of the IMAA programs