Earnout part of total value of a transaction?

I have a quick question on a transaction value of a closed deal. Let's say Company A bought Company B with $100mn in cash and they were uncertain about Company B's future performance. So they will pay extra $100mn over the next 5 years based on their performance, which is an earnout.
Would this make the transaction value of $200 mn? or $100mn since it's is uncertain.

Any advice would be greatly appreciated!

 

It's still TBD, but as for when the transactions actually closed the transaction value would have to be considered what the buyer paid for it ($100M) -- assuming it's not structured in the form of deferred compensation. It can be adjusted upward in the future should the company meet the stipulated performance/operational benchmarks.

 

Eum quis eum fugit consequuntur. Accusamus autem facilis illum alias in. Voluptatem eveniet distinctio excepturi harum aliquid. Exercitationem tempora excepturi quia.

Facere facere porro eum adipisci commodi. Numquam molestiae velit odio inventore. Est sunt pariatur aliquid sint et at id. Quaerat numquam quasi error ea.

Modi vitae ea voluptatibus. Enim et aut aut vitae nobis.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
kanon's picture
kanon
98.9
6
dosk17's picture
dosk17
98.9
7
GameTheory's picture
GameTheory
98.9
8
CompBanker's picture
CompBanker
98.9
9
DrApeman's picture
DrApeman
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”