Equity Rollovers in M&A: Bridging the Finance and Valuation Gap

Negotiating and Structuring Rollovers; Tax Considerations for Buyers and Sellers

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, June 7, 2017

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will provide guidance to deal counsel for structuring equity rollovers in M&A transactions, focusing on current market trends, governance provisions, stock rights, and tax considerations for both buyers and sellers.

Description

The seller equity rollover is a popular vehicle for bridging the finance and valuation gap in private equity mergers and acquisitions. The technique aligns management with the new company and signals the seller’s confidence in the acquired company to prospective buyers and financiers. Equity rollovers facilitate a smooth ownership transition.

Rollovers are typically structured as an exchange by the seller of a percentage of its equity for common or preferred stock, thus resulting in a reduction in the cash purchase. Equity stakes generally are between 10 and 49%. The seller is generally offered certain governance rights and input regarding future operations of the business.

When properly structured, the rollover can be a tax-free transaction for the seller. However, an equity transaction may limit the buyer’s ability to step up the tax basis of the acquired company’s assets. Counsel must understand the tax treatment in these deals in order to achieve the desired tax outcomes for the parties.

Listen as our authoritative panel of practitioners guides you through seller equity rollovers in M&A deals. The panel will look at current trends in equity financing, rights and obligations of each party, and tax considerations for both buyers and sellers.

READ MORE

Outline

  1. Equity rollovers—current market trends
  2. Structuring rollover provisions: rights of seller
    1. Preemptive rights
    2. Tag-along, drag-along rights
    3. Registration rights
    4. Voting rights
    5. Transfer restrictions
  3. Tax implications and deal structures to optimize tax outcomes

Benefits

The panel will review these and other key issues:

  • In what situations are seller equity rollovers an attractive financing option for private equity M&A deals?
  • What are the key tax issues to understand and consider when using equity rollovers?
  • What stock rights must be negotiated between the buyer and seller in a rollover transaction?

Faculty

Hardy, David
David R. Hardy

Partner
Osler Hoskin & Harcourt

Mr. Hardy’s practice focuses on corporate and international tax including the tax issues affecting corporations...  |  Read More

George H. Wang
George H. Wang

Partner
Barton

Mr. Wang focuses his practice on mergers, acquisitions, joint ventures, investments and broad-scope business...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$297

Download

$297