An earn out is a purchase price adjustment mechanism commonly used on the sale and purchase of a company where the buyer wishes to make a part of the purchase price contingent on the post-completion performance of the company during a period of between 1 and 3 years.

Earn outs explained

An earn out is a purchase price adjustment mechanism commonly used on the sale and purchase of a company where the buyer wishes to make a part of the purchase price contingent on the post-completion performance of the company during a period of between 1 and 3 years.