By Mr. Steve McCullough, CPA & Ms. Anita Dabrowska, CPA
This session from Transaction Advisor’s Deals Forum: Private Equity & Middle Market Transaction Structuring conference discussed advancements in M&A tax structuring, including how buyers and sellers can create additional value via tax matters.
Warranty & indemnity (W&I) insurance, better known in the US as representations and warranties (R&W) insurance, has seen sustained growth over the past decade. The development of its terms and coverage has differed among jurisdictions, influenced by the M&A practice in each country and the variation in underlying legal principles
In an M&A transaction, buyers often incorporate language into purchase agreements that institute a termination fee the target company pays when such agreements aren’t consummated. Two recent rulings addressed the appropriate tax treatment of such termination fees.
One of the most striking recent trends in private M&A is the increasing use of warranty and indemnity (W&I) insurance. Many of the terms of an insurance policy are negotiable and this article outlines some of the provisions that advisers may wish to focus on.
This article summarizes some of the tax benefits—and the tax complexities—associated with a taxable stock purchase acquisition structure. For illustrative purposes, the author analyzes a hypothetical involving the acquisition of a C corporation by an LLC.