What's the best structure for an earn-out here?

by a searcher from The University of Chicago - Booth School of Business

1 year ago

What's the best structure for an earn-out here?
Situation:
The owners are being forced to sell (personal issues) before they would like. They want to keep running the business for a few more years to hit some ARR goals and get a higher price.

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6 comments

searcher

Roland Fraiser is the guy to go to if you want to get creative with structuring a deal.

1 year ago | like reply | 0 likes

searcher from Norwich University

Ask them what they want. Maybe he/she wants to still run the business for 5-7 years. Do seller financing for 60-70% of the business over that time period. You would control the company and you could decide if the remaining 30-40% would be bank financed or seller gets paid at end of term based on new EBITDA or revenue formula that you work out.

1 year ago | like reply | 0 likes

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