Earnouts in Healthcare Transactions: Bridging the Valuation Gap, Minimizing Stark and AKS Risk

This CLE webinar will guide healthcare attorneys on earnouts in healthcare transactions. The panel will examine the components of a well-structured earnout and discuss best practices for designing earnouts to minimize disputes. The panel will also address the risks, including potential violation of Stark and the Anti-Kickback Statute (AKS). The panel will offer guidance for structuring earnout provisions.

M&A transactions routinely include earnout provisions for various reasons, including as a mechanism to bridge valuation disagreements and to alleviate concerns by both parties about tendering or receiving a fair purchase price. Earnouts can allow either an upward price adjustment post-closing—when sufficient value is created to justify a higher purchase amount—or innovative financing for an originally agreed upon price. Further, earnouts can deter disagreements during the negotiation of the deal price, however, they may result in post-closing disputes over the earnout itself.

While earnouts are a beneficial tool for parties in M&A deals, such provisions may come with additional risks in healthcare M&A transactions. Such provisions could implicate the Stark Law or the Anti-Kickback Statute. Buyers and sellers need to carefully navigate valuation and purchase price issues in healthcare transactions and draft earnout provisions accordingly.

Listen as our authoritative panel of healthcare attorneys examines earnouts in healthcare transactions. The panel will examine the components of a well-structured earnout and discuss best practices for designing earnouts to minimize disputes. The panel will also address the potential risks, including violation of Stark and AKS. The panel will offer guidance for structuring earnout provisions.