Any business whose owner managers are themselves the core assets of the business, is a prime candidate for an earn-out deal – which is why earn-outs are a common feature of acquisitions in the media sector. In the current market, earn-outs can look an especially attractive proposition – both to vendors wanting to maximise the value of their business on exit and to buyers wanting to mitigate risk in pricing the deal. But an earn-out isn’t an off-the-shelf solution – each will have to be carefully negotiated and structured so that it takes account of the specific circumstances of each deal. Jon Breach and Graham Clayworth, partners at BDO Stoy Hayward, look at the issues.
The past couple of years have not been kind to the media industry – marketing services have been particularly hard hit. Advertising agencies, public relations firms and ad-driven publishing houses have all struggled as a result of the downturn in advertising spend and the tightening of client’s budgets. But the
