Tax is an important consideration in any M&A transaction.
If you are intending to acquire a business through buying ownership interests in the entity that operates the business (Target), then you will most likely inherit the legal and tax history (and risks) of the Target. As such, it is essential to review the Target to understand and measure any underlying disclosed and undisclosed tax liabilities and risks inherent in the entity being acquired to prevent any post-acquisition headaches. Sometimes risks and exposures identified through the due diligence process can also impact on the price the buyer is willing to pay to acquire the Target. Even an asset purchase can impose some liabilities on the purchaser, including transfer duty, and can also result in the purchaser taking on underlying liabilities embedded in components of the business being assigned (including employees).
Forvis Mazars tax professionals can assist with your M&A transactions, including:
- Pre-sale restructuring – review of business structure with a view to efficiently restructure assets not essential to the business being sold
- Vendor due diligence (report prepared ahead of sale to assist with negotiations)
- Purchaser due diligence (report prepared for purchaser to advise on tax risks inherent in the entity being acquired)
- Review of tax aspects of financial model to support purchase
- Sale and Purchase Agreement (SPA) – review of tax aspects
- Acquisition Structuring – understanding the purchaser’s profile and advising on a structure that allows for optimal commercial and tax outcomes.
These services can be combined with a Forvis Mazars financial due diligence or we can provide a stand alone service tailored to your specific scope.
