Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
How Earnout Antifraud Provisions Work in M&A Deals
Episode 45 of The Acquisition Talk digs into the $47 million earnout fraud case at a med-tech acquisition in 2023, where the buyer alleged the seller inflated EBITDA by deferring R&D expenses. Lucas and Luna walk through the three antifraud provisions that can protect buyers—specific indemnity, post-closing true-up, and clawback rights—and why most middle-market earnout agreements miss at least one. They discuss how a mid-2024 FTC advisory opinion on earnout accounting shifted the enforcement landscape, and what operators negotiating earnouts today should look for in their own contracts. If…
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