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Earnouts, CVRs and manipulating outcomes

Published December 2, 2009 at 1:01 PM
The difficult economy has more dealmakers turning to earnouts and contingent value rights to bridge valuation gaps. These deal structures allow sellers to net future payments or additional shares if the acquired company meets certain predetermined outcomes. Earnouts and CVRs   offer comfort to buyers worried they are overpaying in a volatile market and to sellers who believe their assets are worth more than buyers are willing to pay. William Venema, an attorney with Epstein Becker & Green PC, says while these deal structures can help get parties to close, they can also increase the risk of post-close litigation. See the video below or download it at iTunes. - Suzanne Stevens


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