Earnout-Basics

Diageo built a $300M, 10-year earnout into their $1B acquisition of Casa Amigo Tequila. Earnouts are being used more and more in deals, especially with the anomaly of COVID running roughshod over EBITDA in 2020.

If you want a succinct overview of earnouts, Aprio’s Partner of Business Valuation in the Transaction Advisory group Carrie Zhou, ASA breaks them down in this roughly 6-minute video clip from a recent business valuation webinar.