Sale of digital media business to UK private equity house

We advised on the sale of a digital media business group to a UK private equity firm in a locked box deal of up to £40m. The deal consisted of cash, earn out and management rollover equity (and sweet equity). We provided comprehensive tax and accounting sales support throughout, including:

  • Obtaining tax clearances from HMRC.
  • Advising on all share option matters, including employee benefit trusts (EBT) transactions and detailed analysis comprising of over 100 EMI option holders (many with multiple option grants and receiving rolled equity).
  • Assist in valuation of sweet equity received by key management.
  • Ensuring the private equity structure and acquisition mechanics qualified for Capital Gains rollover treatment

Key highlight:
We worked with the target’s finance team to produce personal Capital Gains statements and tax return completion instructions for over 100 shareholders.

EMI advisory support for media business

haysmacintyre advised on the sale of a UK group to a US private equity buyer. The deal value of up to £35m consisted of cash, buyer’s equity and earn out. We delivered detailed sales tax support throughout, including:

  • Implementation of EMI options (HMRC valuation, legal documentation, HMRC reporting) in the run up to seeking a sale.
  • Comprehensive analysis on whether shortening the Target’s year end increased the value of its tax attributes for the vendor shareholders (their total cash value equating to circa £3m).
  • Drafting of tax asset schedule of the share purchase agreement (SPA), including EMI share option deduction relief, R&D, tax losses and US tax assets.
  • Assisted in answering specific tax due diligence queries, including analysis of past share acquisitions by employees/directors to demonstrate that no significant tax risk existed, despite absence of US Section 431 income tax elections.
  • Advice on US buyer acquisition structure (consisting of a chain of LLCs) and the risks to the vendor shareholders in qualifying for Capital Gains rollover.

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