Co-authored with Bloomberg Law® and featuring data from both SRS Acquiom MarketStandard® and Bloomberg Law, this report analyzes trends in earnout or milestone components to M&A purchase price within non-life sciences deals. Key features of earnout mechanisms and recent case law regarding earnout disputes are also reviewed.

Special Report: M&A Earnout Trends 2017–2018

Introduction

As 2019 begins, SRS Acquiom and Bloomberg have looked back to identify key earnouts trends over the last few years.[1] While 2018 was not quite a banner year for M&A — due in part to a slowdown in deals in the second half of the year — it was still a strong year overall. Given its strength, we would expect seller-favorable trends in deal terms to continue. However, buyers are still finding ways to protect their investments. One such trend is an increase in earnout or milestone components to purchase price outside the life science sector. This article analyzes some key features and trends in earnout mechanisms and earnout disputes.

[1] The authors wish to acknowledge and thank Andrew Hubley, formerly Sr. Legal Editor and currently Customer Experience Manager with Bloomberg Law, for his assistance with earlier drafts of this Special Report.

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