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An arrangement where at least part of the purchase price on the sale and purchase of a business is calculated by reference to the future performance of the business being purchased. Commonly used as a management incentive where owner-managed businesses are sold and the managers continue to work in the business following the sale.+ earn-outUSAAn arrangement where at least part of the purchase price of a business is calculated by reference to the future performance of the business being purchased. An earn-out is typically structured as one or more contingent payments after the closing which are payable on the satisfaction of certain milestones (such as future sales targets). An earn-out can be used as an incentive for management where the prior owner continues to manage the business following the sale.For a discussion of earn-outs, see Practice Note, Earn-outs (www.practicallaw.com/0-500-1650).Related links
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.
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Earn out — is a term used by private equity and venture capital investors to describe a formula by which management of a target company earn a bigger share of the target s share capital by achieving results above pre determined levels. It is also used to… … Wikipedia
earn out — verb bring to a zero balance, bring up to date, defray the expenses, lend, loan, paid back, pay back after an advance, repayment, used up Generally:{{}}indemnify, recoupment, reimburse, remit, remunerate Burton s Legal Thesaurus … Law dictionary
earn out — To make enough money from sales to recover costs or make a profit • • • Main Entry: ↑earn … Useful english dictionary
Earn out — Eine Earn Out Klausel definiert in einem Kaufvertrag einen Anteil des Kaufpreises, der zu einem späteren Zeitpunkt erfolgsabhängig bezahlt wird.[1] Solche Klauseln finden sich vor allem in Unternehmenskaufverträgen. Inhaltsverzeichnis 1… … Deutsch Wikipedia
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. Bloomberg Financial… … Financial and business terms
earn-out period — ➔ period … Financial and business terms
earn-out agreement — contingent contract An agreement to purchase a company in which the purchaser pays a lump sum at the time of the acquisition, with a promise to pay more (a contingent consideration) if certain criteria, usually specified earnings levels, are met… … Accounting dictionary
earn-out agreement — contingent contract An agreement to purchase a company in which the purchaser pays a lump sum at the time of the acquisition, with a promise to pay more (a contingent consideration) if certain criteria, usually specified earnings levels, are met… … Big dictionary of business and management
earn-out arrangement — Fin a procedure whereby owner/managers selling an organization receive a portion of their consideration linked to the financial performance of the business during a specified period after the sale. The arrangement gives a measure of security to… … The ultimate business dictionary
earn one's keep — {v. phr.} To merit one s salary or keep by performing the labor or chores that are expected of one. * /John earned his keep at the music conservatory by dusting off all the musical instruments every day./ … Dictionary of American idioms
