In May, we wrote about the increased focus on earn-out provisions during the pandemic as a method to mitigate the risk of a target’s post-closing under-performance and to bridge any valuation gap between the purchaser and seller. More recently, we
earn-outs
Earnouts: Sharing Risk and Reward in Uncertain Times
The turbulent economic environment resulting from the COVID-19 pandemic has affected the M&A world in numerous ways. Among them is the increased focus on earnout provisions, both those in place from legacy deals and those being considered for inclusion in…
Smart contract applications in M&A: earn-outs
This blog has previously provided an overview of how blockchain technology and smart contracts might be adapted to the legal industry. In this post, we will explore the specific example of how these technologies may be able to simplify an…
Tax considerations for earn-outs and reverse earn-outs
As we have previously noted, earn-outs are becoming an increasingly common part of M&A deals, and there are a number of key commercial questions to consider when negotiating them. But there are also tax consequences that must be considered when…
Shareholder representatives in M&A
The post-closing process can be complex and time consuming. Hiring a professional independent shareholder representative to manage post-closing matters, such as purchase price adjustments, indemnification claims, earn-outs and escrow management, may be beneficial for target shareholders and management. In recent…