Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
The Earnout Seller's Best Friend: The Independent Arbitrator Clause
In this episode of The Acquisition Talk, Lucas and Luna dissect a specific post-closing dispute that cost a seller $24 million because the purchase agreement handed the earnout calculation to the buyer's own CFO. They walk through the mechanics of the independent arbitrator clause—how a neutral third party with industry-specific expertise can prevent a buyer from lowballing an earnout, and why sellers often waive it in the heat of negotiation. With a concrete example involving a mid-market software company acquired by a strategic buyer in 2024, the hosts explain the difference between an…
The skinny
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