Earn-out

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Earn-out

Refers to an additional payment in a merger or acquisition that is not part of the original acquisition cost, which is based on the acquired company's future earnings relative to a level determined by the merger agreement.

Earn-Out

In an acquisition, an additional payment made to the acquired company's former owner(s) in the event that certain earnings are met. For example, a company may acquire another for $75 million, with an additional $10 million in cash and/or stock if the acquired company's earnings outperform expectations by a certain percentage. Earn-outs are based on the acquired company's potential future earnings.
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The aggregate consideration for the acquisition paid at closing was USD 2.5m, with earn-outs in an amount up to USD 7.5m to be paid upon the achievement of certain financial metrics over a three-year period, subject to a guaranteed payout of USD 2.5m.
Earn-outs add an additional 1.0 million shares in each of year one and year two.
The investors have pegged 100 per cent equity valuation for GAL at post-money valuation of Rs 18,000 crore plus earn-outs of up to Rs 4,475 crore linked to achievement of certain agreed milestones and performance metrics over next five years or so.
Earn-outs could add an additional 1 million shares in each of year one and year two.
Earn-outs are the top way to possibly create future litigation between the sale parties.
As part of this combined asset digitization strategy and HooXi's vision as the "green tech, clean tech, and medical health care flagship", the transaction involves a share for share swap between SSC and Liberty, for Common shares at market value and Performance shares at market value, based on revenue and EBITDA earn-outs.
The deal is valued at USD900m in cash and USD100m in potential earn-outs. It is likely to be completed during 2019, subject to customary closing conditions.
Consistent FCF Finance Earn-Outs: Although yearly interest expense increased following the company's 2017 refinancing, funds from operations (FFO) margins are expected to stabilise at around 8%, due to stronger EBITDA margins.
The firm will also pay earn-outs over 24 months after the deal is closed.
But if they do, they will be bucking a well-established trend, where business-dam- aging earn-outs blunt the brilliance of those agency brands we all regard as high- water marks in creativity.
The mine was sold to state-owned Solid Energy, which is itself in a precarious financial position, for $7.5 million, with earn-outs up to $25 million if it's commercially re-opened.