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Mergers and Acquisitions

Nuwaru can help guide you through M&A transactions. We have experienced professionals who can apply pragmatic M&A tax and transaction solutions in an increasingly complex and regulated taxation environment.

Nuwaru works with corporates, private equity funds, fund managers, individuals, and family offices. We collaborate closely with our colleagues and with external advisers in the M&A deals space to help you navigate an efficient, “no surprises”, value creative path that delivers the desired commercial and tax outcomes of your deal.

Establishing the structure of a deal

Nuwaru can help you with the planning, preparation and positioning of your deal:

  • Identifying the parameters that maximise the acquisition or sale value
  • Evaluating the tax implications of the various transaction options, such as the use of a Bid Co in an acquisition scenario (where seeking step up in cost base and a loss refresh) or the choice between a Top Hat versus a Sale Co structure for an IPO
  • Structuring the future operating model of the business, to ensure all stakeholders understand how the business will operate moving forward, such as holding company structures, IP holding entities and service companies
  • Collaborating with you to critically assess all potential risks and ensuring the risks are appropriately mitigated to enhance deal value, such as tidying up any outstanding compliance or reporting obligations before the deal proceeds

Due diligence

Whether on the buy side or sell side, the due diligence is key to ensuring that the risks and opportunities of the deal are understood. We help our clients by:

  • In the case of a sale or IPO, preparing a tax vendor due diligence report, outlining the tax status and tax attributes of the business being sold and to make the sale process quicker and easier
  • In the case of an acquisition, assessing the tax profile of the target business, including its compliance position, tax attributes and overall operating model is important (regardless of whether a vendor due diligence is available)

The outcome of the due diligence may influence the deal price, the need for insurance of tax risks and will drive the nature and veracity of the tax warranties and indemnities offered or sought.

Negotiating effectively

Nuwaru can guide you through the Sale and Purchase Agreement (SPA) negotiations, advise on the tax implications and help you to maximise the value from the SPA. We help you by:

  • Advising on any tax adjustments that need to be made for differences between Enterprise Value and Equity Value
  • Negotiating the tax aspects of the SPA. This includes pricing considerations, relevant representations, warranties, indemnities, or any other tax related clauses in the SPA
  • If tax risks are identified in the due diligence that require adjustment to the purchase price, we can also help you to negotiate any dispute between the parties

Equally, in the case of an IPO, the content and tone of the tax comments in the Prospectus can drive key messaging and deal value. For example, clear comments around dividend and tax credits may be value accretive and tax governance and transparency comments may be important in demonstrating ESG investment metrics. We help ensure you get your tax commentary right.

Optimal capital structure

Understanding the tax implications for investors and required funding is critical. The benefit of tax attributes at the operating company level must be assessed against the after-tax returns to investors.

We can help with:

  • The overall capital and funding structures, including the potential use of tax advantages structures such as Management Investment Trusts, Venture Capital Limited Partnerships, CCIVs, etc
  • Understanding the tax implication of potential exit strategies
  • The impact of any carried interests/co-investment plans and employee share schemes
  • Funding structures, including management of thin capitalisation issues
  • Dividend and tax crediting strategies

Executing the deal

Tax value is often lost though poor execution and implementation of a deal.

Execution of the deal does not stop on settlement. Issues such as tax consolidation, CGT calculations, stamping documents or applying for relevant exemptions, etc need to be addressed post settlement.

We can help with:

  • Preparing a step plan for completing the transaction
  • Dealing with stamp duty and other tax compliance obligations associated with the deal
  • Ensuring the deal is executed and documented in accordance with your Tax Governance and Risk Framework
  • Ensuring the execution of transaction facilitates an efficient and sustainable ongoing operating structure for the business
  • If required, any post-acquisition restructuring

Establishing the structure of a deal

Nuwaru can help you with the planning, preparation and positioning of your deal:

  • Identifying the parameters that maximise the acquisition or sale value
  • Evaluating the tax implications of the various transaction options, such as the use of a Bid Co in an acquisition scenario (where seeking step up in cost base and a loss refresh) or the choice between a Top Hat versus a Sale Co structure for an IPO
  • Structuring the future operating model of the business, to ensure all stakeholders understand how the business will operate moving forward, such as holding company structures, IP holding entities and service companies
  • Collaborating with you to critically assess all potential risks and ensuring the risks are appropriately mitigated to enhance deal value, such as tidying up any outstanding compliance or reporting obligations before the deal proceeds

Due diligence

Whether on the buy side or sell side, the due diligence is key to ensuring that the risks and opportunities of the deal are understood. We help our clients by:

  • In the case of a sale or IPO, preparing a tax vendor due diligence report, outlining the tax status and tax attributes of the business being sold and to make the sale process quicker and easier
  • In the case of an acquisition, assessing the tax profile of the target business, including its compliance position, tax attributes and overall operating model is important (regardless of whether a vendor due diligence is available)

The outcome of the due diligence may influence the deal price, the need for insurance of tax risks and will drive the nature and veracity of the tax warranties and indemnities offered or sought.

Negotiating effectively

Nuwaru can guide you through the Sale and Purchase Agreement (SPA) negotiations, advise on the tax implications and help you to maximise the value from the SPA. We help you by:

  • Advising on any tax adjustments that need to be made for differences between Enterprise Value and Equity Value
  • Negotiating the tax aspects of the SPA. This includes pricing considerations, relevant representations, warranties, indemnities, or any other tax related clauses in the SPA
  • If tax risks are identified in the due diligence that require adjustment to the purchase price, we can also help you to negotiate any dispute between the parties

Equally, in the case of an IPO, the content and tone of the tax comments in the Prospectus can drive key messaging and deal value. For example, clear comments around dividend and tax credits may be value accretive and tax governance and transparency comments may be important in demonstrating ESG investment metrics. We help ensure you get your tax commentary right.

Optimal capital structure

Understanding the tax implications for investors and required funding is critical. The benefit of tax attributes at the operating company level must be assessed against the after-tax returns to investors.

We can help with:

  • The overall capital and funding structures, including the potential use of tax advantages structures such as Management Investment Trusts, Venture Capital Limited Partnerships, CCIVs, etc
  • Understanding the tax implication of potential exit strategies
  • The impact of any carried interests/co-investment plans and employee share schemes
  • Funding structures, including management of thin capitalisation issues
  • Dividend and tax crediting strategies

Executing the deal

Tax value is often lost though poor execution and implementation of a deal.

Execution of the deal does not stop on settlement. Issues such as tax consolidation, CGT calculations, stamping documents or applying for relevant exemptions, etc need to be addressed post settlement.

We can help with:

  • Preparing a step plan for completing the transaction
  • Dealing with stamp duty and other tax compliance obligations associated with the deal
  • Ensuring the deal is executed and documented in accordance with your Tax Governance and Risk Framework
  • Ensuring the execution of transaction facilitates an efficient and sustainable ongoing operating structure for the business
  • If required, any post-acquisition restructuring

Sam Lo Ricco

sam.loricco@nuwaru.com

+61 400 520 382