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Illustration: Annelise Capossela/Axios

Deal-making in the pandemic felt like a supercharged version of business as usual, minus the plane trips and closing dinners. But there were some significant changes inside of the deal structures, according to a new report from advisory firm SRS Acquiom.

Between the lines: Many buyers hedged their bets, offsetting high valuations with lengthy earnouts.

SRS Acquiom found that the percentage of non-life sciences deals with an earnout increased from 15% in 2019 to 19% in 2020, and that the median earnout potential as a percentage of the closing price soared from 18% to 39%.

  • It also found that nearly half of the earnouts were for two years or more, and that the percentage of earnouts based on Earnings/EBITDA rose to 24% from from 16% in 2018 and 2019 (revenue tests fell to 58% from 67%).

Other pandemic-driven changes included an increase in the percentage of termination fees included in deals (19%) and the introduction of "pandemic" and "COVID-19" carveouts into material adverse effect clauses (77% and 64%, respectively, in Q3 2020 deals).

  • Methodology: SRS Acquiom analyzed more than 1,400 private-target acquisitions, representing over $285 billion in value, that it worked on between 2016 and 2020. Most of the deals and their terms were not publicly reported.

Look ahead: The question moving forward is how much, if any, of this structural shift outlasts the virus.

Go deeper

Updated 53 mins ago - Sports

Katie Ledecky wins gold in first women's 1500m freestyle

Team USA's Katie Ledecky celebrates after winning the final of the women's 1,500m freestyle swimming event during the Tokyo 2020 Olympic Games at the Tokyo Aquatics Centre in Tokyo on Wednesday. Photo: Attila Kisbenedek/AFP via Getty Images)

Katie Ledecky took home the Olympic gold medal in the women's 1,500-meter freestyle swimming race Tuesday evening, becoming the first female swimmer to win the newly added division. Team USA's Erica Sullivan won silver.

Of note: The Tokyo Games mark the first time that the long-distance race has been open to women, and Ledecky paid tribute to her predecessors after the race. "I just think of all the great U.S. swimmers who didn’t have a chance to swim that event," she said on NBC.

Updated 1 hour ago - Sports

Olympics dashboard

Katie Ledecky celebrates with teammate Erica Sullivan after winning the women’s 1500m freestyle final. Photo: Tom Pennington/Getty Images

🚨: Katie Ledecky wins gold in first women's 1500m freestyle

🤸🏾‍♀️: Simone Biles pulls out of gymnastics team finals, citing her mental health

🎾: "This one sucks more than the others," Naomi Osaka says on upset loss

⚽️: USA women's soccer ties Australia, propelling them to the quarterfinals

🏊‍♀️: Teen swimmer Lydia Jacoby wins first U.S. women's Tokyo Games gold

👟: World Athletics president supports reviewing marijuana rules in doping

🏄‍♀️: American Carissa Moore wins first-ever women's Olympic gold in surfing

Go deeper: Full Axios coverage - Medal tracker

Activision Blizzard CEO calls company's response to suit "tone deaf"

Photo: Bloomberg/ Getty Images

Activision Blizzard CEO Bobby Kotick sent a lengthy letter to employees late on Tuesday, listing steps the company will take to address widespread allegations of sexist and discriminatory conduct at the "Call of Duty" and "World of Warcraft" gaming company.

Why it matters: This was the most comprehensive message from the company, and a softer one than had been sent by Kotick's PR people and a top executive last week.

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