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Resources for Sound Business Decisions.™

Seven Key Factors that Influence Price Negotiations

Using the Fair Market Valuation and the seller’s asking price as a starting point, there are seven critical factors that will influence the premium or discount to be applied in reaching a negotiated purchase price package. These seven factors include: The types of buyer. Financial parameters. The general attractiveness of the company. The relative negotiation […]

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Earn-Out Agreements: Part 3 – Buy-Side Considerations

Note to the Reader: This is the third in a series of articles that explore the definition, application and issues of including earn-outs in negotiated M&A transactions. An earn-out can reduce a buyer’s initial investment, bridge the value gap and provide an incentive for the seller. For the value-oriented negotiator, the primary objective of an […]

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Earn-Outs Agreements: Part 2 – Possible Outcomes

Note to the Reader: This is the second in a series of articles that explore the definition, application and issues of including earn-outs in negotiated M&A transactions. An earn-out is an opportunity for both buyer and seller to maximize their respective post-acquisition returns on investment, but it doesn’t always play out that way. Generally, there […]

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Earn-Out Agreements: Part 1 – An Overview

An earn-out can allow an otherwise willing buyer and seller to bridge the gap in their respective valuation concepts for the business in order to complete a sale. In periods of economic and political uncertainty, earn-outs seem especially attractive because they can help get deals done in a difficult business climate. Recently, one adviser gave […]

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