DealLawyers.com Blog

SRS Acquiom recently released its 2026 M&A Earnouts and Claims Study. The study collectively analyzes 1,174 private-target M&A deals that closed between 2009 and 2026 (most of which closed in the last three years). The study reviews earnout outcomes, claims frequency dispute resolutions and other post-closing matters that impact the economics of M&A transactions. Here are some of the key findings:

– While 52% of deals with earnouts resulted in at least a partial payment, the median earnout achievement rate was just 17% of the maximum potential amount.

– Earnout success is closely tied to performance period length, with shorter-duration earnouts producing significantly stronger achievement rates. Earnouts with performance periods of one year or less achieved a median earnout achievement rate of 66%, compared to 36% for earnouts with performance periods exceeding three years.

– Post-closing indemnification claims activity differs meaningfully depending on whether a deal includes RWI. 28% of deals analyzed experienced at least one post-closing indemnification claim, and RWI-backed deals were 29% more likely to experience a claim than deals without RWI. Among deals with a claim, those with RWI generally saw a greater percentage of escrow claimed than deals without RWI.

– Tax-related matters remain the most common source of RWI claims, and accounted for 38% of all breach of representations and warranties claims analyzed in the study.

– John Jenkins