Contingent Value Rights

Contingent Value Rights are “an instrument committing an acquirer to pay additional consideration to a target company’s stockholders on the occurrence of specified payment triggers,” according to this article written by several attorneys at Wachtell, Lipton, Rosen & Katz.  First used in several high-profile transactions in the late 1980s, CVRs are now primarily used to “bridge valuation gaps relating to uncertain future events that would impact the target company’s value.”