During the sale of a company, the deal must benefit both the buyers and the sellers. To minimize tax liability and get the best bang for their buck, many sellers get a tax minimization analysis done. Tax minimization also comes in the form of how the business is structured and the knowledge the owner has about the tax code.                 A tax minimization analysis (TMA) is a strategic assessment of a person or business’s financial circumstances to legally reduce tax liabil

Due diligence in a merger or acquisition is the investigative process that a buyer conducts to fully understand the financial, legal, operational, and strategic condition of a target company before finalizing a deal. It is essentially a verification step that ensures the buyer is not relying solely on what the seller says; it also allows the acquiring company to identify risks, validate value, and uncover issues that could impact the deal structure or the decision to move for

Valuation is the process of determining what a company is truly worth. This then serves as the basis for negotiations between buyers and sellers. It helps buyers understand the company’s financial health, future growth, and potential risks, and guides the deal overall. There are many valuation methods, and each has its own positives and negatives. A few of the popular ones are the discounted cash flow method, the comparables method, and asset valuation.                 In the

In an acquisition, there are 2 things that determine how ownership, liabilities, and assets are transferred from the seller to the buyer, whether the purchase is a stock purchase or an asset purchase.             An asset purchase is when a buyer acquires the tangible and intellectual assets of the selling company. These types of assets include but are not limited to office supplies, production equipment, machinery, real estate, customers, accounts, patents, trademarks, websi

Whether to merge with another company to grow bigger, acquire another company for their assets, or sell to get out of the business, there are four main reasons we have seen as to why businesses would like to go down this path of mergers and acquisitions.             The first main reason why a business looks to acquire is to boost performance efficiency. Combining business activities boosts production while costs tend to decrease, this is because both businesses are using eac

An acquisition is the process by which one company purchases most or all of another company’s shares or assets in order to gain control of that company. The acquiring firm, often referred to as the “parent” or simply “buyer”, takes ownership of the wanted company’s operations, employees, resources, suppliers, and debts, usually with the goal of expanding market reach, acquiring new technology, or increasing profitability. Unlike a merger, where two companies of relatively sim