Earn-out Provisions in Private M&A: Navigating Potentials and Pitfalls
In an M&A transaction, potential business valuation differences between the buyer and the seller may arise. The parties may then agree to enter an earn-out arrangement to bridge this gap. Under this structure, the buyer of a business will be required to pay future payments, in addition to the initial payment, once the business achieves specific milestones.
While an earn-out reconciles valuation differences, businesses must still be wary in negotiating this type of arrangement as it poses a myriad of risks, such as future disputes. It is, therefore, imperative that counsel is well-versed and critical in analyzing and drafting earn-out agreements to ensure that client’s rights are protected.
Join a panel of key thought leaders and practitioners assembled by The Knowledge Group as they provide the audience with an in-depth discussion of earn-out agreements. Speakers will dig deeper as they discuss recent trends and developments and analyze critical issues and challenges. They will also offer risk mitigation techniques and best practices to avoid red flags.
This LIVE Webcast will discuss the following:
- Earn-out Provisions in Private M&A: An Overview
- Structuring an Earn-out Agreement
- Emerging Trends and Developments
- Potentials and Pitfalls
- Risk Mitigation Techniques
- Best Practices
Sumner Schick, LLP
Hoffman & Kessler LLP
- Is an earn-out appropriate for the transaction?
- Selecting the proper earn-out metrics.
- Aligning the interests of Seller and Buyer; post-closing operation of the acquired business.
- Avoiding short-term incentivization
- Seller’s protections v. operational flexibility
- Form of earnout payment
- Tax considerations
- The earn-out determination process
- Accounting issues
- Pre- and post-closing consistency
- Transaction-related expenses
- Seller’s protections v. operational flexibility (redux)
- Post-closing efficiencies/synergies
- Buyout/termination options
- Dealing with disputes
Jacob Stasny focuses his practice on matters involving private equity transactions and other complex business deals, business litigation, and commercial real estate, serving clients in a broad array of industries, including finance, healthcare, energy, technology, and manufacturing. Focusing on the representation of businesses, Mr. Stasny has navigated numerous debt and equity finance transactions, corporate acquisitions and divestitures, project finance transactions, commercial real estate transactions, commercial bankruptcies, and matters involving the formation, operation, and liquidation of virtually every type of business entity, in Texas, numerous other states, and offshore.
Jacob Stasny focuses his practice on matters involving private equity transactions and other complex business deals, business litigation, and commercial …
Richard S. Green, Of Counsel to Hoffman & Kessler LLP, focuses on corporate and securities matters, and providing practical, business-oriented strategic advice to clients. He has nearly 40 years of experience in complex transactions and corporate governance.
Richard’s transaction and negotiation experience includes mergers and acquisitions (enterprise values of up to $3 billion), private and public debt and equity financings – including initial public offerings, private equity and venture capital deals, joint ventures and partnerships, spin-offs and restructurings, and the development, financing and sale of infrastructure projects (including public-private partnerships), including power plants using both fossil fueled and renewable energy sources, port facilities, highways, bridges and transportation projects, and strategic transactions involving infrastructure businesses, including civil engineering firms, constructors and building materials suppliers.
Richard has been recognized in Best Lawyers in America (Energy Law), multiple years; Best Lawyers in America New York Lawyer of the Year 2015 (Energy Law); and Super Lawyers (Business/Corporate), multiple years. Richard is also a past Chair of the Energy Committee of the New York City Bar Association.
Richard S. Green, Of Counsel to Hoffman & Kessler LLP, focuses on corporate and securities matters, and providing practical, business-oriented …
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Method Of Presentation:
General knowledge of mergers and acquisitions (M&A)
NY Category of CLE Credit:
Areas of Professional Practice
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About Sumner Schick, LLP
For more than three decades, our distinguished trial lawyers and corporate attorneys have represented businesses and individuals with respect to their most important legal matters. Our mission is to provide the highest standard of representation in the most cost-efficient manner.
About Hoffman & Kessler LLP
Hoffman & Kessler LLP, formed in 2018, is an agile, responsive law firm that strives to add meaningful value to its clients' businesses. The firm’s practice is concentrated in commercial and intellectual property litigation, as well as corporate transactions and securities matters, including mergers and acquisitions, corporate finance and corporate governance, and a wide range of general business matters.