RTO Sale: Receiving Full Sale Amount in Cash
Circumstances / Situation
Our client was offered $10 million for the sale of their RTO organisation. They required taxation and structuring advice on the best way to structure the sale, and assistance with documenting and negotiating the sale terms.
Solution
We proposed the sale of the shares in the holding company rather than the trading company as this would secure a more manageable taxation outcome. We then assisted with structuring earnout payments to qualify for look-through earnout treatment and scrip for scrip rollover relief.
Following completion of the share sale, we negotiated on behalf of the client the early payment of the full earnout and release from post-completion obligations and scrip requirements.
Outcome
The client received the full $10 million of sale proceeds as cash rather than scrip in a tax-effective manner.
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