1 / 9

TAXES & VALUATION - ADVICE FOR WHEN YOU NEED TO SELL

At MergersCorp we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction. Find more at: http://mergerscorp.com

mergerscorp
Download Presentation

TAXES & VALUATION - ADVICE FOR WHEN YOU NEED TO SELL

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. TAXES & VALUATION - ADVICE FOR WHEN ADVICE FOR WHEN YOU NEED TO SELL WWW.MERGERSCORP.COM

  2. At MergersCorp M&A International we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction. It is our goal to make the process of either buying a new business or selling your current business as smooth and efficient as possible. We know how important confidentiality is to our sellers and we treat it with the utmost importance. WWW.MERGERSCORP.COM

  3. TAXES & VALUATION - ADVICE FOR WHEN - ADVICE FOR WHEN YOU NEED TO SELL WWW.MERGERSCORP.COM

  4. For many businesses a lot of time in the accounting department is spent in reducing the tax burden. There are many different methods that are put into play including changing the ownership structure, deferring outgoings and accelerating incomings. However, when it comes to selling your business, all these things can then put the financial side of the business in a poor light. Potential buyers will be looking at the cash flow. The procedures used to save the business money can end up lowering the perceived value of the business. So what can be done? Well, with adequate preparation, usually taking three to five years before a sale, practices can usually taking three to five years before a sale, practices can be revised to nullify these negative effects. Even with less time of say a year things can be done to help value your business in a truer light. If you are worried that this would mean giving up all the tax benefits, rest assured that there are ways in which tax benefits can continue. An experienced Mergers and Acquisition advisor, with sufficient time, can find ways in which tax benefits continue, whilst arriving at a better valuation of the business.

  5. As well as ownership restructuring, the accounts need to be thoroughly reviewed in order to root out wasteful spending, correct inaccuracies in inventory statements and rework revenue deferrals or expense accelerations. Off the record transactions will also need to be examined. A new look needs to be made on assets. Are these underperforming, depreciated or accurately valued on the books? A review should be made of the capital expenditure budget. Other aspects that can be considered are the burden of personal unrelated expenses on the business and the mixing of other related businesses in the accounts. Also decisions need to be made about getting your financial statements reviewed or audited. financial statements reviewed or audited. All these changes on the financial structure take time and diligent work to arrive at the desired outcome. However, the more time and effort put in, the better off you are at the end of it.

  6. In summary, selling a business takes time and preparation in many areas, not least on the side of the financial structure and, methods. Preparation should ideally start around three to five years before a sale in order to get the business shown at its best. In particular some of the practices that are used to reap the best tax benefits need to be reviewed. There are ways to do this, which keep the benefits whilst still showing the financial standing of the business in a good light. Disclaimer : This article gives general information and is not legal advice. For your own individual case you need to seek advice from a certified accountant. Keywords: selling a business, valuation, tax benefits, financial review, reducing tax burden, avoiding devaluation, pre-planning a business sale

  7. Our M&A Process NEGOTIATION & CLOSE POST MERGER INTEGRATION (PMI) INTEGRATION (PMI) POST MERGER TARGET APPRAISAL APPROACH DUE DILIGENCE Key Areas  Target & market analysis;  Initial assessment of synergies & value drivers;  Indicative valuation;  Go or No-Go decision;  Preparation of transaction documents (NDA – Non- disclosure Agreement/LOI- Letter of Intent); Letter of Intent);  Select Transaction team;  Appoint advisors;  Consider funding ability.  Initial approach letter;  Signing of NDA;  Prepare & share initial information requests;  Formulation of LOI (Letter of Intent) & possible negotiations;  Initial meeting and Q&A;  Circulate information on the  Circulate information on the Target to the Transaction team.  Set scope of due diligence;  Set up VDR (virtual data room);  Coordinating of due diligence, further meetings and Q&A sessions;  Consider points relevant to the Post-Merger (PMI) phase; phase;  Revisit indicative valuation & prepare detailed valuation based on due diligence findings;  SPA negotiations with the seller;  Development of final structure (share/asset deal) and final valuation; and final valuation;  Approvals;  Signing of SPA & Close.  Consider the extent of integration;  Development of 100 Day PMI Plan;  Consider short & long term objectives;  Estimate requirements to capture synergies;  Determine resource needs  Determine resource needs & optimal allocation. Parties Involved  CFO;  Head of M&A;  Accountants;  Corporate finance advisors;  Consultants.  Senior management;  CEO, CFO, CTO;  Strategy director;  Head of M&A;  Head of Business Development;  Consultants.  Company general counsel;  Lawyers;  Senior management.  Company general counsel;  Lawyers;  Senior management/HR. 7 © Midaxo 2018 www.midaxo.com

  8. Looking to Buy or Sell a Business? CONTACT US NOW FOR A FREE BUSINESS VALUATION WWW.MERGERSCORP.COM

  9. MergersCorp.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Member firms of the MergersCorp network of independent firms are affiliated with MergersCorp International. MergersCorp International provides no client services. No member firm has any authority to obligate or bind MergersCorp International or any other member firm vis-à-vis third parties, nor does MergersCorp International have any such authority to obligate or bind any member firm. Copyright © 2020 MergersCorp International. All rights reserved. 9 © Midaxo 2018 www.midaxo.com

More Related