On Thursday, Roark Capital reached an agreement to acquire Subway, with insiders revealing that the transaction values the U.S. sandwich chain at a potential $9.55 billion, encompassing debts and contingent upon specific financial performance goals.

This deal concludes a protracted auction initiated in February, which drew interest from multiple private equity firms. As highlighted by Reuters on Tuesday, a significant factor in Roark’s successful bid for Subway was an earn-out agreement.

Under the terms of this agreement, the full acquisition amount will be disbursed only if Subway’s cash flow achieves predetermined milestones over a period extending across two or more years following the closure of the deal, as outlined by insider sources. Should the earn-out not be realized, the deal’s value stands at $8.95 billion, according to the same sources.

Earn-out arrangements, although unusual within the consumer and retail sector, are becoming more prevalent within the current challenging landscape for mergers and acquisitions, serving as a method to reconcile discrepancies in valuation.