Facilitator Guide

Earn-Outs and Purchase Price Adjustments

Facilitator Guide

Earn-Outs and Purchase Price Adjustments

Topic: M&A Basics

What’s covered

Purpose of purchase price adjustments
Metrics used for purchase price adjustments
Mechanics of purchase price adjustments
Purpose of earn-outs
Common earn-out milestones (financial and operational)
Drafting considerations

Before the session

Prepare the Attendees

Send the attendees an invitation for the session. Include this link, which has the videos and exercise they’ll need to prepare.

https://www.hotshotlegal.com/trainings/earn-outs-and-purchase-price-adjustments/attendee

Prepare Yourself

Watch the videos and read the exercise so you’re familiar with the Hotshot material.

Course

Earn-Outs and Purchase Price Adjustments

A look at earn-outs and purchase price adjustments, including why they’re used, common metrics, and how they work in practice.
Exercise
PDF

During the session

Part 1: Knowledge Check

Ask attendees these questions to ensure they understand the topic:

What are purchase price adjustments, what are earn-outs, and how do they differ?
How do these provisions mitigate risk?
How is a purchase price adjustment implemented?
What kinds of milestones do earn-outs use?
When drafting these provisions, what do you need to keep in mind? Why?

Part 2: Group Exercise

Lead a group discussion based on the exercise. To encourage collaboration, divide the attendees into groups to discuss the exercise, then have a representative from each group summarize their views to the larger group. Call on people to share their thoughts and ask others to respond.

Tip for remote sessions: use your web conferencing system’s breakout room feature to divide people into groups.

Part 3: War Stories and Firm Specifics

Share your own experiences and guidance, including:

Anecdotes and war stories (e.g., about a near-disaster or a tough negotiation)
General practice tips (do’s and don’ts)
Firm-specific guidance and practices

After the session

To continue their learning, attendees can check out related courses in Hotshot’s M&A Basics topic.

About Hotshot

Hotshot helps lawyers develop their legal, business, and technology skills through short videos, quizzes, and summaries, and we help law firms and law schools plan and deliver engaging training programs. Our customers include Am Law 200 firms, top law schools, and regional and international firms.