Our structured acquisitions programs provide business owners a better exit strategy.
Our solutions increase the flexibility and after tax yield to sellers on terms that can 'bridge the gap' for transactions that often could not happen otherwise.
Sellers can leave the closing table with 95% - 100% of net sales proceeds, versus the 70-75% that they typically receive on an after tax basis.
Some of these acquisition strategies include:
The IRS allows for tax deferral on installment sales. We structure acquisitions that help bridge the gap between sellers and ultimate buyers in ways that allow sellers to defer taxes while still enjoying the post transaction liquidity they need through periodic payments, third party loans and equity joint ventures in the sellers' new endeavors which we help arrange.
These types of acquisitions allow sellers to sale the business, finance their retirement, OR step away from management (effectively becoming Chairman of the Board) while both professionalizing management and enjoying tax deferral. In these situations we, along with current employees, take over the operations. Post transaction the company enjoys greater cash flow through a combination of third party financing and / or tax savings under ESOP rules.
These transactions allow sellers to avoid capital gains tax by transferring assets to what we call a 'family investment company' which is able to sell the asset tax free, while remaining in full control of the seller. This remains the family investment vehicle which provides ongoing opportunities in investing, legacy and charitable planning and wealth accumulation.
The Value of Tax Deferral
Illustration of future value of $100,000 tax deferred versus present value of starting balance after inflation. Assumes 30 years investment at 10% and 2% inflation.
Select List of Popular Transactions
Further Reading (PDFs)
IRS Does Not Challenge Monetized Installment Sale - GCM 20123401f
Tax Advantages in the Sale of a Business
By combining specialty financing structures with tools in the tax code, small and middle market sellers can balance the often competing variables of valuation, terms, liquidity, control and tax position.