Private Equity M&A Fundamentals 2026: How Sponsors Structure Deals and Exits — and How to Draft Earnouts That Survive J&J v. Fortis

Live · 2 CLE credits · November 17, 2026, 2:30 PM ET

When a sponsor exits, the earnout is where post-closing disputes begin. Structure platform add-ons, minority investments, and rollover equity with the exit in mind—then draft efforts, anti-interference, and dispute-resolution clauses that hold up after the 2026 Delaware Fortis decisions.

The Seller Takes the Earnout. The Buyer Keeps the Keys.

Private equity deals are not strategic deals. Sponsors build platforms through add-ons, take minority and growth positions, roll management into the equity, and plan the exit from day one. Fund life, LP expectations, and co-investors shape terms from entry through exit. Now three Delaware decisions—Johnson & Johnson v. Fortis Advisors, Fortis Advisors v. Krafton, and Fortis Advisors v. Stillfront—are reshaping how the earnouts on those exits get drafted.

Lean on buyer discretion or the implied covenant, and J&J shows Delaware will enforce the efforts clause the parties actually negotiated. Take operational control away from the sellers, and Krafton shows the remedy can be specific performance and a longer earnout period. Send the earnout calculation to an accounting firm, and Stillfront shows that arbitration versus expert determination decides who hears the fight. Meanwhile, SRS Acquiom data shows how often earnouts actually pay.

You leave with a framework for negotiating PE deal structures from the sponsor, management, and buyer perspective. You also leave with a drafting checklist: precise milestones, the right efforts standard, anti-interference covenants, control and information rights, and clear dispute allocation. That is negotiating judgment no template supplies.

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