Transaction Services For Sellers
Are you looking to sell or recapitalize your business? Are you looking to carve out a portion of your business to better position the retained businesses for a divestiture or capital raise? Or are you seeking to combine your business with another party’s business in a joint venture? Do you possibly need to dispose of certain assets or certain business units as part of a turnaround or restructuring? The CTW team excels at working with such transactions. Our experience will help you to anticipate issues and maximize after-tax proceeds. We offer the peace of mind that comes with knowing you have highly experienced advice on what could be one of the more important transactions of your life.
Pre-Transaction Preparation of Business
Pre-transaction planning should begin well before the actual transaction. CTW can help you prepare your business for a transaction.
This planning includes recommendations such as:
Focusing management on producing predictable operating results
How to best reduce risks that could lead to financial surprises
Suggestions on the legal form and organization of the business units
A disposition structure that allows the business to be tax-efficiently divested
Tax Structuring of Disposal or Investment
Disposition transactions can range from outright sales, to mergers, to the formation of joint ventures. These transactions could involve multiple taxing jurisdictions including states, cities and foreign countries. The optimal tax structure can vary greatly due to the wide variety of factors at play.
CTW professionals can work with you to effectively prepare your business for transaction. This process can start years in advance, allowing us to organize operations and ownership for a tax-efficient transaction.
As the transaction nears, we will work with the buyers, joint venture partners, and merger partners. We can assist in optimizing the tax results of transactions to the divesting parties. We will also seek to eliminate or defer the net tax costs where possible and consistent with the law.
Pre-Transaction Modeling and Feasibility
Sellers interested in a business valuation may need to support your targets with financial models. These models are designed to anticipate the cash flows from the business, and their impact on the valuation.
CTW can work with you to ensure the quality of these models. This service includes:
Reviewing, building, or supporting management in the development of models
Maintenance of models to compute expected and actual after-tax proceeds from transactions
Information to help you execute or walk away from transactions
Information to help you determine when to pursue post-transaction controversies
This process will allow you, the seller, to make informed decisions.
Pre-Transaction Representation in Due Diligence
Almost all transactions will go through due diligence. The CTW team can guide you through this exercise so that you are prepared to provide the typical documentation. We will also work with you to identify possible issues where a potential buyer may want more information.
The advanced preparation ensures that the diligence process goes smoothly. We can also interface with the financial and tax due diligence teams members to relieve the burden on the seller.
Tax Review of Transaction Documents
A transaction often involves lengthy transaction documents, including:
An asset purchase agreement
A stock purchase agreement
A merger document
A contribution agreement
An operating agreement
A partnership agreement
The drafting of these documents often involves many modifications. This can lead to ambiguous agreements and misunderstandings on the tax reporting of the transaction.
CTW will work with you to read and model the transactions. This will allow us to ensure that the transaction document provisions are clear. If they are not, we will provide recommendations to help clarify the process.
Almost all sellers take on responsibilities or certain review rights following a transaction. These responsibilities range from tax reporting to review calculations and allocations. Many of these items have a direct impact on the seller’s net proceeds.
However, many sellers lose their access to supporting staff following the transaction. This can lead to a lack of follow-through on these responsibilities and review rights.
CTW will work with you to create a post-transaction checklist and can assist in connection with these items.
Post-Transaction Dispute Resolution and Controversy
Despite efforts to avoid surprises, disputes do arise following a transaction. These may concern issues like:
Breached representations or warranties
Net working capital adjustment calculations
The computation of contingent consideration
Disputed claims against escrowed consideration
The computation of make-whole adjustments
Often, these disputes involve accounting or tax definitions. Because of this, CTW professionals can work with the seller's counsel in connection with these controversies. We have had a great record of success in this area.