Sell-Side Tax Considerations for Mergers and Acquisitions – Part 3: Effectively Negotiating the Tax Aspects of the Purchase Agreement

  |  June 12, 2019

A purchase agreement not only sets forth the terms and structure of the transaction, but also establishes who benefits from valuable tax deductions that may be created in connection with the transaction.

Hence, it is of critical importance that sellers have a thorough understanding of the various tax sections of a purchase agreement and take a proactive approach to achieving the desired outcomes. Read more. Read More

Sell-Side Tax Considerations for Mergers and Acquisitions – Best Practice #2: Evaluating Tax-Structuring Alternatives

  |  May 28, 2019

Ensuring that a transaction is structured in a tax-efficient manner is critical in maximizing a seller’s after-tax proceeds. Evaluating the various structuring alternatives available before undertaking a formal sale process allows a seller to identify a preferred structure and set expectations with prospective buyers regarding deal structure at the onset of the sale process. Read more. Read More

Sell-Side Tax Considerations for Mergers and Acquisitions – Part 1: Performing Sell-Side Tax Due Diligence

  |  May 20, 2019

Now more than ever, sellers and their advisors are beginning to appreciate the value of having a thorough understanding of a company’s tax profile, areas of potential tax risk, tax attributes, and desired structure of a transaction before undertaking a deal process. Amid these changes in the dynamics of how sellers approach taxes in sale transactions, employing best practices can have a dramatic impact on outcomes.

In this article and two more to follow, we outline three best practices that are some of the most critical for sellers to consider in order to maximize deal value and ensure a smooth process when disposing of a business or business line. Read more. Read More

The Value of Due Diligence to a Business Transaction

  |  May 3, 2019

You’ve decided to sell your company. How do you make sure you will receive fair value for the true worth of the business? After all, you have spent years building a brand, a reputation, and success of your business. Now that you’re finally considering your exit strategy, it is vital that you can meet your objectives when the exit is imminent. Read more. Read More

The Impact of M&M Candies in Business Valuation

  |  January 31, 2019

Rock band Van Halen’s 1982 world tour performance rider contained a provision (under the Munchies section) demanding a bowl of M&M candies backstage, with all the brown M&Ms removed. The consequence of even a single brown M&M found in the bowl was a forfeit of the entire show at full price – and maybe even a trashed dressing room.  

The motivation behind the provision was actually a hidden safety measure. Read more. Read More

Vendor Fraud: A Continuing Threat

  |  August 14, 2017

Vendor fraud continues to be a major threat to organizations. In fact, vendor, supplier and procurement fraud is the second most prevalent fraud, according to the 2016-2017 Kroll Global Fraud Annual Report.

Who is the most at risk from vendor fraud? Read more. Read More

The Importance of the Insured’s Finances on First-Party Claims

  |  July 26, 2017

Two principal questions serve to illustrate the financial issues that may confront carriers in handling a first-party claim. First, so-called time element losses such as business interruption, loss of use, and additional living expense claims highlight the importance of understanding the insured’s on-going operations for purposes of evaluating the value of a loss.

Second, a discussion of questionable or even fraudulent claims illustrates how a complete understanding of the insured’s finances can identify red flags and, potentially, proof that the insured has overstated their claim or had a motive to commit arson or stage the theft of goods, services, and materials related to their business. We begin, therefore, with a discussion of those two issues as they arise under common first-party claim situations. Read more. Read More

Occupational Fraud Is a Worldwide Problem

  |  June 28, 2017

Over the years, I have been invited to speak to various groups, and in a variety of venues, on the topic of employee theft—or, as the Association of Certified Fraud Examiners (ACFE) likes to call it, Occupational Fraud. In June, I had the opportunity to speak again on this subject, this time in London, U.K.

For my visit to the United Kingdom, I made use of this international data which shows a significant amount of consistency with results from the U.S., and a few surprises. Read more. Read More

Proposed Regulations May Limit Valuation Discounts for Estate and Gift Transfers

  |  August 28, 2016

In our Summer 2015 Valuation & Forensics newsletter, we reported that "Valuation Discounts on Certain Transfers May Soon Be Limited," and one year later, it appears this may finally come to pass. In early August 2016, the IRS proposed new regulations that are designed to limit valuation discounts in intra-family transfers of ownership interests in corporations, partnerships, limited liability companies and family limited partnerships. Read more. Read More

Quality of Earnings: Important Considerations for Buyers and Sellers

  |  April 27, 2016

When it comes to evaluating “quality,” buyers, sellers and, most importantly, financial institutions, often have widely diverse opinions, that can greatly affect their decision to proceed with a particular transaction.

Nobody likes surprises. All parties involved spend considerable time and energy just to get to a proposed transaction. In evaluating the quality of earnings, the elements that always receive significant attention are the depth and breadth of the businesses’ key customer/vendor relationships; repeatable business processes that are executed daily without exception; and the strength of key staff beyond the owner(s). Read more. Read More