Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
The Earnout Trap That Cost a Seller $14 Million
Episode 133 of The Acquisition Talk with Fexingo. Lucas and Luna break down the earnout trap that cost a seller $14 million after a private equity buyer gamed the post-closing performance metrics. They walk through the specific contract language — the definition of EBITDA, the treatment of bad debt, the allocation of overhead — that turned a promised $20 million earnout into a $6 million payout. Listeners learn why earnouts are riskier than they look, how to spot the three clauses that almost always trigger disputes, and why experienced sellers increasingly demand cash at close instead. A…
The skinny
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