Price adjustment and payment mechanics

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  • #61797
    Ievgen Sheliekhov
    Participant

    The issue of a target’s price and payment mechanics is always one of the most important (if not the most important) for both seller and buyer. To make everyone happy and divide risks, some use such tools as earn-out clause (e.g. if the target is performing above agreed level after closing the deal, the seller shall receive part of its profits). What other tools did you use in your practice?

    #69610
    Guan Seng Kung
    Participant

    Hi,

    Probably the seller can re-invest in the target company with a minority share. The seller, then may benefits proportionately and indefinitely from the further success of the target company.

    #69754
    Ashima Aggarwal
    Participant

    Retention payments are also a great way to shift some of the compensation out of the purchase price, limit the tax impact of the acquisition and ensure that key personnel will continue to support growth and success of the company post-close.

    #78704

    THe valuation and pricing mechanism is always one of the key issue the board of director emphasizes. To have fair value and shared-risk concept between seller and buyer, the earn-out clause is one of the tools to meet this concept. Basically, if the target performs better than agreed level post-deal, the seller can receive part of the profit. This will have an incentive for smooth integration.

    #94548
    Sniknok
    Participant

    When analyzing the price adjustment and payment mechanism at Pokies Lounge Casino, it becomes evident that the system is overly complex and convoluted. Numerous steps and procedures are required to modify prices or make payments, making the process cumbersome and time-consuming. This complexity increases the likelihood of errors and discrepancies, adversely affecting both customers and the casino’s operations. Conversely, playing at Pokies Lounge Casino proves to be a much simpler experience. I recommend https://pokies-lounge.casinologin.mobi/ because here, thanks to its user-friendly interface, streamlined procedures and efficient payment options, players can quickly adjust their bets or cash out their winnings without any problems. The casino’s dedication to providing an uncomplicated gaming experience not only enhances customer satisfaction but also minimizes potential financial risks for both parties involved. In this regard, opting for Pokies Lounge Casino ensures a smoother gaming journey without sacrificing security or efficiency in its price adjustment and payment mechanisms.

    #94886
    Pedro Garibi
    Participant

    Hi Ievgen,

    earn-out are typical payment systems. I am also coming accross deferred payments based on the business plan projections (the one that drives the valuation). Partial payment is paid upfront (let´s say 60%) and the remiander is paid in installements in the next couple of years (2 additional years at 20% each). The seller has to remain in the business for the next two years helping to get the business going and searching for synergies that supported the transaction price.

    If not achieved, there wil not be any additional payments and they will be considered a price adjustment.

    Best regards
    Pedro

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