• Tax due diligence - identifying the tax exposure of a deal and how it may be mitigated, with clear focus on risk assessment.
• Structuring an acquisition or disposition - advice on the tax consequences of individual acquisitions, joint ventures and divestments in order to help design tax-efficient deal structures.
• Tax modeling - assistance in forecasting post-deal tax liabilities in business models.
• Vendor assistance - Preparation of vendor side documentation and tax advice on the tax implications of the sale of a business, including pre-deal reorganization measures and settlement of historic tax risks
• Post-deal integration - helping member firms' clients reconcile their own tax positions and those of the acquired business.

How we can help your business

Using KPMG’s global network and experienced professionals across different services areas, we can help companies understand processes, avoid pitfalls and seize opportunities of deals. We understand the practical impact of tax developments from one country to the next and when we spot opportunities, we know how to act on them to benefit member firms’ clients and their stakeholders.

With a strong focus on transactions with a private equity background, KPMG’s M&A Tax professionals are commercially minded and deal hardened — they know how to identify and advise on the material tax exposures in a transaction and to develop deal structures that appropriately address the tax implications. Working on transactions day-by-day, they are process-driven and understand the mechanics of acquisition and disposals in a competitive environment.

 

Why tax-efficient mergers and acquisitions matter

Companies with global ambitions cannot afford to ignore the opportunities for possible growth offered by mergers, acquisitions and disposals. But if these transactions are to create real value, it is important that the tax implications of each deal are dealt with from the onset. This is especially important in cross-border deals, where differing regulations and business cultures need to be reconciled in order to reveal the risks and opportunities of a transaction.

Similarly, private equity seeking to increase return on investment cannot afford to ignore tax. Recent trends show that M&A transactions have become more international and deal volumes have increased tremendously. Highly-leveraged transactions allow for big ticket deals, in particular within private equity market.

Understanding how a deal is done

In a highly professional and competitive deal environment, many transactions are organized as structure auctions. Only the strongest bidder will win. When strategic investors compete with private equity for a few attractive target offered, understanding how a deal is done becomes critical. To assess the real value of a transaction you need to understand the historical tax risks associated with an enterprise for sale. To win an auction, you can also need to evaluate and quantify upside potential. In many cases, tax can make a difference.

Getting the timing right

Running an M&A process means coordinating many different work-streams within a very strict timeline. In the auction processes, there is little flexibility surrounding bid deadlines. Deadlines are short to keep management attention to an acceptable minimum. Valuable time can be lost just trying to organize your deal team. Tax due diligence, international acquisition structuring and modeling tax in the acquisition target's business forecast should be addressed immediately.