• An earn-out is a type of financing in which the full payout is deferred until the acquirer verifies the financial success of the business within a predetermined period of time after the closing date. It is a practical financial tool for an instance when a gap exists between the valuation price and allotted funding from the buyer. They can also be a very valuable tool when a significant client concentration exists or when the trailing twelve month’s financials are substantially above or below prior years. However, earn-out rewards may be difficult to measure when the deal involves merging two existing businesses. An earn-out is a more relevant financial option in an acquisition or divestiture.

  • For anyone who is interested in becoming involved with an M&A transaction—whether as the buyer or the seller—it is important to assemble a team of advisors that will assist in the process. The advisory team should consist of an M&A intermediary, an accountant, and a lawyer. These advisors can provide a balance of knowledge from a business brokerage standpoint, a financial standpoint, and a legal standpoint, all of which are necessary to the completion of a successful deal. This article explains why hiring a lawyer for M&A is part of a larger team for success.

  • Buying or selling a business is a complicated endeavor that many people prefer not to venture upon without a professional guide. Buyers and sellers who utilize an M&A intermediary are able to maximize the value of their deal and complete it successfully. An M&A advisor oversees the entire course of buying or selling a business and acts as a financial advisor through each step of the process. The intermediary will ensure that those new to buying or selling a business are not taken advantage of due to a lack of experience. 
    The following is a list of questions to ask during the hiring process so that one may determine which intermediary to hire.