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Earn-out

Earn-out: An earn-out is deferred, contingent purchase price that a buyer pays a seller only if the practice reaches agreed performance targets after closing.

An earn-out is deferred, contingent purchase price that a buyer pays a seller only if the practice reaches agreed performance targets after closing.

Earn-outs bridge price gaps when buyer and seller disagree on future performance. They usually tie to collections or EBITDA over a set period and often coincide with the seller’s work-back, since the seller’s presence affects whether targets are met.

Part of the DDSIntel glossary. See how the figures are built in the methodology. Markdown version: /glossary/earn-out.md.

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