Mergers and Acquisitions Tax

Our Expertise

Mitigate tax exposure while maximizing transaction value

If you’re planning for the acquisition or sale of a business, engaging in both tax structuring and due diligence — in tandem with each other — is critical. These practices will both mitigate existing tax exposures and identify new tax strategies that will not only speed up the transaction process but also maximize return on your investment.

Our team members are experts in all elements of tax law and will work closely with you throughout all phases of a transaction. We’ll collaborate with you to implement tax planning ideas and ensure the transaction is reported as structured and the appropriate elections are made. We can help design and develop a comprehensive tax plan to optimize your savings opportunities, enhance cash flow, and increase the profitability of your organization.

Whether your transaction is domestic or cross-border, less than $1 million or more than $1 billion, we’ll make sure your interests are represented and protected throughout the negotiation, closing, and reporting processes.

Buy-side due diligence

As a buyer, you’ll benefit from due diligence. It’s essential if you want to understand the stories behind the numbers, assess your target’s historical financial performance and condition, identify key drivers of trends, and recognize both weaknesses and future opportunities. It can also help important to identify and minimize federal tax exposures, especially for the successor tax liabilities of your target related to pre-closing period operations. Buy-side due diligence should also be conducted for state and local taxes on income, gross receipts, sales, use, franchise, property, payroll, and others.

Planning for tax losses, credits, and earnings and profits (E&P)

Since an ownership change often limits the use of net operating losses and tax credits, it’s important that you understand the full tax picture before entering into a transaction. We can conduct a Section 382 analysis to determine the amount of net operating losses that will be available after a transaction. We can also calculate earnings and profits for your company to determine how determine how distributions after a transaction will be taxed.

Sell-side due diligence

If you’re planning on selling your business, it’s important to understand tax implications, quantify tax attributes, and identify red flags for a prospective buyer. Sell-side due diligence can result in a higher sales price, can reduce the time and complexity of buy-side due diligence, and speed up the sale process. Our sell-side tax due diligence team will help you determine your company’s tax exposure and suggest key steps to mitigate it. The team will save you time, address challenges, and maximize your sales price.

Tax modeling

As you enter into a transaction, we can help you calculate your after-tax proceeds, quantify the after-tax cash flow differences between potential transaction structures, and compute the value of a step-up in tax basis received by the buyer. Then, to maximize the value of your transaction, we’ll determine which tax attributes are available. This includes planning for net operating losses, tax credit carryforwards, and the recovery of the tax basis of assets.

Tax strategy

During the acquisition or sale of your business, a strategic tax position can directly impact your return on investment. We can help you consider strategies such as asset sale versus equity transactions, purchase price allocations, Section 1202 studies, earnout pricing structures, and proper rollover planning.

Tax structuring

If you’re buying or selling a business, raising capital, expanding into new markets or industries, or restructuring your current organization, your business value can be maximized with proper tax structuring. Our specialists can help you implement tax planning ideas that will ensure your transaction is structured efficiently. In addition, we’ll help develop a comprehensive tax plan designed to optimize saving opportunities, enhance cash flow, and increase profitability for your organization.

Transaction cost analysis

When buying or selling a business, you’ll likely incur significant transaction banking, legal, accounting, and regulatory fees. You can maximize your tax benefits if these costs are properly planned for and analyzed. Our experts can help increase cash flow and return on your investment by finding ways to accelerate deductions and minimize your tax burden. To give you peace of mind with the tax treatment of transaction costs, we’ll help identify and manage risk.

Transaction reporting

Timely, accurate reporting of your transaction will reassure you that you have received every possible tax benefit. For a smooth transition post-close, you’ll need a prompt analysis of final closing information and an examination of the tax treatment of transaction-related costs and basis adjustments. And to achieve the desired tax treatment and transaction results, you’ll need to identify and implement the appropriate transaction-related tax elections. Our team of specialists will guide you through each of these tasks. We’ll work proactively with you and your accounting team to collect key data, identify tax planning opportunities, and accurately reflect that data and your transaction in your tax filings.

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Client Experience

Supporting your transaction from start to finish

When it comes to tax matters on mergers and acquisitions, you can count on our team to bring the resources you need based on the unique dynamics of your transaction. Our expertise ranges from taxable transactions to tax-free reorganizations.

Our tax structuring specialists can help you:

  • Structure your transaction to maximize tax efficiency.
  • Structure the acquisition or disposition of assets or equity.
  • Conduct a forward or reverse merger or other transaction-related reorganization.
  • Make a Section 338 and 336 election, if appropriate, to treat an equity transaction as asset transaction.
  • Quantify the benefits and the detriments of your transaction, working with your attorneys, investment bankers, and other advisors to achieve an optimal tax outcome.

Mike Monaghan, leader of the firm’s tax due diligence and structuring practice, says it best: “Whether you’re acquiring or selling a business, raising capital, expanding into new markets or industries, or restructuring your current organization, proper tax structuring can be the key to a successful transaction. We have experts in every area of a transaction you’d need, giving you peace of mind, knowing your transaction has all its bases covered, and giving you the biggest return on investment possible.”