Rolling Deal Fees on a tax (free) efficient basis - independent sponsor

searcher profile

May 30, 2019

by a searcher from University of Pennsylvania - The Wharton School in Miami, FL, USA

Hello Community. I am seeking guidance on how to "roll" deal fees into an acquisition on a tax free/efficient/delayed basis. e.g. 

Purchase Price: $10M 
Deal Fee: 3% = $300,000 rolled into company equity

Does anyone have any experience or direction they can provide on how this deal fee can be structured so as avoid paying taxes at close and defer them until an exit/refinance?

Thank you!
Jason

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commentor profile
Reply by a searcher
from University of Pennsylvania in Miami, FL, USA
Yes, thank you Nick. I have read through this and it is really the only document i can find in the public domain. Unfortunately it does not have the nuance of how to actually structure around my question. I believe there are timing issues and need to be very careful around how it is structured. There is a lot missing here :) I am seeking someone with knowledge or someone who has done it before who is willing to share the detail.
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Reply by an investor
from Dartmouth College in 80 S Main St, Hanover, NH 03755, USA
Jason -

Katten published a brief article on this subject 3+ years ago here: https://www.kattenlaw.com/Structuring-Equity-Interests-for-Independent-Sponsors
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