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16 March 2020

COVID-19 and what it means for M&A Transactions and Earn-Outs

In some M&A transactions, an earn-out mechanism is agreed upon between the buyer and the seller, under which payment of part of the purchase price is deferred in tranches, falling on agreed dates (typically at an annual frequency). An earn-out is most typically agreed upon when the buyer and the seller cannot agree on the purchase price, and hence they bridge a gap in expectations to the purchase price by way of deferring part of the purchase price subject to target’s performance following the acquisition, typically the financial performance, e.g. turnover, EBITDA or similar key figure.

Mattias Vilhelm Warnøe Nielsen

Partner

+45 30 37 96 95

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Niels Christian Høgh Andersen

Associate

+45 30 37 96 11

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The Latest

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