Overview

An earn-out is a means of ensuring that buyers do not overpay for (and sellers do not undersell) businesses that may be difficult to value upfront. Part of the purchase price is paid on completion of the acquisition, with the balance dependant on the future performance of the target business. So, everyone's a winner?

The recent decision of the High Court in Porton Capital Technology Funds and others v 3M UK Holdings Limited and another shows that this is not always the case. Expectations on both sides may often be far too high.

What are the implications for buyers and sellers of businesses, together with their advisers? Wragge & Co's corporate team have prepared an analysis of the case as well as practical action points to consider.

Click 'View Briefing' to read on.