Fairstone’s approach to earn-out success

The structuring and use of earn-outs are very much the norm in the sale of any people-based business owing to the more involved and fluid nature of securing full value from the transaction for both parties.

Earn-outs are an increasingly prominent component of M&A transactions for sound commercial and operational reasons, and can be one tool for bridging valuation differences in the deal-making process. 

When used properly, earn-outs can provide anyone looking to sell their business with an additional opportunity post-deal to further increase sale value after the point of purchase, to true-up and validate the headline price. 

However, the whole issue around earn-out structures and crucially the likelihood of a seller receiving their full consideration, is something which does not receive enough emphasis.