M&A Earnouts and Economic Uncertainty: Negotiating and Structuring, Best Practices for Avoiding Disputes
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will examine the components of a well-structured earnout and discuss best practices for designing earnouts to minimize disputes. The panel discussion will also include results from the latest SRS Acquiom Survey regarding earnout provisions in M&A transactions, and how that may inform earnout negotiations.
Outline
- Earnouts
- Current market trends: impact of COVID-19
- Determing when an earnout is appropriate for the transaction
- Performance metrics and other threshold issues
- Structuring earnout provisions
- Operating control issues
- Dealing with unanticipated events
- Post-closing covenant: buyer and seller
- Determining when performance metrics have been acheived
- Resolving conflicting positions regarding the earnout
Benefits
The panel will review these and other critical issues:
- When is an earnout the right tool to bridge the valuation gap?
- What is the correct metric to use for an earnout, and how is it best defined?
- What covenants are appropriate for operating the target business after closing with respect to the earnout?
- What dispute resolution provisions should be included in the purchase agreement regarding the earnout?
Faculty
Andrew Noble
Director, Dispute Management
SRS Acquiom
Mr. Noble works with selling shareholders to resolve post-closing claims for indemnification, earnout and milestone... | Read More
Mr. Noble works with selling shareholders to resolve post-closing claims for indemnification, earnout and milestone issues, third-party litigation, and other matters that arise after the acquisition has closed. Before joining SRS Acquiom, he was a litigator at a San Francisco-based law firm where he tried numerous cases on behalf of financial institutions, primarily concerning commercial and consumer mortgage lending and investment partnership disputes.
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Paul Pryzant
Partner
Seyfarth Shaw
For over 35 years, Mr. Pryzant has represented clients in a variety of mergers and acquisitions, equity and debt... | Read More
For over 35 years, Mr. Pryzant has represented clients in a variety of mergers and acquisitions, equity and debt financings, and other corporate transactions. He regularly works with entrepreneurs who want to sell or merge their companies, and the buyers of those companies, each of whom faces their own challenges with the transaction. As part of his practice, Mr. Pryzant regularly works with strategic buyers, and private equity funds and their portfolio companies, to acquire software and other high-tech companies that help his clients obtain new cutting-edge technologies and add new products and services.
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Suzanne L. Saxman
Partner
Seyfarth Shaw
Ms. Saxman is Chair of the firm’s M&A group. For more than three decades as a corporate lawyer, she has... | Read More
Ms. Saxman is Chair of the firm’s M&A group. For more than three decades as a corporate lawyer, she has counseled clients—from entrepreneurs and startups to large, privately held companies across multiple industries—through every phase of growth, during times of economic prosperity and economic downturn. Ms. Saxman works with clients in two capacities: executing deals and functioning as outside general counsel, often at the same time. She brings substantial legal know-how, a high-volume track record of transactions, and a commitment to speak the language of her clients in every deal. She analyzes complex, confidential, and strategic opportunities to address the legal issues presented.
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