United States

Private Equity Tax Solutions

CASE STUDY

RSM's state and local tax advisors identified and helped a private equity firm obtain fully refundable credits worth more than $9 million over 10 years for a target acquisition.

The client: A private equity firm focused on the industrial services and manufacturing sectors.

The issue: The firm was acquiring a recreational vehicle manufacturer and wanted to maximize potential tax savings.

The solution: RSM's mergers and acquisitions knowledge and deep industry experience made us an ideal fit to design and implement all tax aspects of the acquisition.

Because our state and local tax professionals had significant knowledge of various tax credit and incentive programs in the target company's home state, RSM was able to identify and obtain an agreement with the state for fully refundable tax credits worth more than $9 million over 10 years, allowing the private equity firm to reduce its investment cost and increase the return to its investors.

Benefit of working with us: Recently, the firm decided to pursue a roll-up and IPO exit with four of its companies. In designing the roll-up, RSM put in place a structure allowing each separate management team and co-investor group to rollover their interests tax-free, while also providing a partial liquidity event to the private equity firm on the combination.

The team is also assisting with the public filings and ensuring that accounting matters are in alignment with SEC requirements. Because RSM audits the portfolio companies, working with us on the IPO saved the private equity firm from having to integrate a new auditor, an often complex task that can delay the IPO process.

By using the firm for tax, audit and IPO work, the private equity firm was able to save time, minimize hassles and optimize terms during the acquisition and exit of its portfolio companies.

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