4 Key Provisions For Every Earn-Out Agreement

Law360, New York (March 23, 2010, 4:18 PM EDT) -- Prevailing market conditions have made it more difficult for buyers and sellers of businesses to consummate transactions. The recessionary environment and diminished market liquidity have resulted in fewer prospective buyers.

Recent trends also suggest that the focus of the few buyers with readily available cash and access to debt financing has shifted from an interest in paying for potential to instead paying for delivery of promised post-acquisition performance.

Thus, while uncertain market conditions persist, in order to bring a proposed transaction to fruition, buyers and sellers...
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