BarbriSFCourseDetails

Course Details

This CLE course will guide deal counsel in negotiating and structuring earnout clauses in M&A agreements that benefit buyers and sellers and reduce the likelihood of post-closing disputes.

Faculty

Description

M&A transactions routinely include earnout provisions as a valuation-bridging mechanism to alleviate concerns by both parties about tendering or receiving a fair purchase price.

While earnouts are a beneficial tool for parties in M&A deals, provisions governing earnouts are complicated and often defer disagreements during the negotiation of the deal price to post-closing disputes over the earnout itself.

Counsel must draft explicit, specific, business-contextualized provisions and procedures relating to the calculation of the earnout and the parties' respective obligations.

Listen as our authoritative panel explains recent trends in the use of earnouts, the pros and cons of including them in M&A deals, and strategies for structuring earnout terms in a way that benefits and protects both buyers and sellers.

Outline

  1. Earnouts
    1. Advantages and disadvantages of earnouts
    2. Relevant performance benchmarks
    3. Current market trends
  2. Structuring earnout provisions
    1. Drafting earnout terms to minimize disputes
    2. Addressing how the buyer must control the business
    3. Tax implications
    4. Drafting effective dispute resolution provisions

Benefits

The panel will review these and other challenging issues:

  • What approaches are effective in negotiating performance benchmarks for deals involving earnout provisions?
  • Current market trends
  • What post-closing concerns should buyers and sellers anticipate and address during deal negotiations?
  • What are the tax issues that counsel must understand and consider regarding earnouts?