Podcasts/ CalCurrent

Earnouts in Purchase Agreements: What Are They, How Do They Work and What Are Some Challenges That Can Occur?

October 01, 2020

Earnouts are a tool used in M&A transactions, specifically a purchase agreement, when a portion of the purchase price for an acquisition is determined based on the performance of the acquired business after the closing of the transaction. LA partner Josh Schneiderman discusses how earnouts are used and how careful negotiation and drafting of the purchase agreement can be critical.



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