Our clients are Arizona-based, small-to-middle market businesses in different stages of growth. Most clients are owner-managed businesses with multiple U.S. locations and represent a variety of industries. Our emphasis on smart, business growth establishes long-term client relationships and ensures clients achieve their business goals. As a result of our advisory services, a number of our clients have received The Association for Corporate Growth (ACG), Phoenix Chapter, Arizona’s Deal of the Year Award.
There are a lot of moving parts with a merger and acquisition, regardless of the tax situation.
Consider the economic situation. Is there a lot of cash on the table available for merger and acquisition activity in your industry? What is the interest rate situation? What are the current valuation multiples?
If you are thinking of a merger or acquisition, you should think about the type. A “stock” acquisition is an ownership interest in a C or S corporation. The acquiring entity receives a tax basis in the stock acquired equal to the consideration paid. Keep in mind the target’s assets carry over at their historic tax basis.
There are “asset” acquisitions, which purchase assets of a business instead of the stock. The purchase of assets typically results in a step-up in the asset basis; the acquiring entity receives basis equal to the consideration paid and liabilities assumed.
No matter the situation, be sure to work with key professionals well-versed in current laws, as there are a lot of subtleties and the situation can change quickly.