A growing number of data center acquisitions are incorporating earnout structures that tie deferred purchase price payments to the delivery of future megawatts rather than traditional financial metrics like revenue or EBITDA. The article cites two public examples: a 2025 Unifi and Enovum transaction that added a power-based earnout requiring commercially reasonable efforts to secure at least 99 MW from Duke Energy within two years, with an $8 million payment if achieved in that window and a $5 million fallback if achieved in the following year; and TeraWulf's 2025 acquisition of Beowulf E&D subsidiaries, where earnout consideration was tied to lease execution, data hall energization, and project financing. Because most data center M&A involves private parties whose agreements never become public, the visible record of these structures likely understates how common they have become. Earnout disputes are identified as a particular risk when buyers control post-closing decisions that determine whether milestones, often dependent on utilities, grid operators, and permitting authorities, are achieved.
The shift toward power-based earnout milestones reflects how scarcity of grid capacity and interconnection rights has become the primary value driver in data center transactions, replacing traditional financial performance metrics. This structural evolution in deal-making has direct consequences for how sellers price development pipelines, how buyers underwrite execution risk, and how disputes are resolved when utility delays or permit denials prevent milestones from being met.
A Data Center Dynamics analysis on the growing use of earnout structures in data center M&A highlights an emerging financial mechanism reshaping how future capacity is valued in deals, relevant to investors and operators.