Management participations

From manager to shareholder

When managers take a financial interest in buying out their company, the day the private equity investor takes over they become fellow shareholders in the business. This means that, in the sale process leading up to this point, managers have to approach the valuation aspects and the business plan from a shareholder’s point of view.

Taking on a capital interest can also go hand in hand with a change of management status. A self-employed directorship can offer pay-package optimisation, but also has consequences in terms of social security cover.

Moreover, it is crucial that the terms under which you take on a financial interest and continue to run the company are set in the proper legal framework. And, as a manager, there are particular points you have to look out for in terms of the tax treatment of the return on your investment.

Experience tells us that one of the key success factors for potential acquirers is their ability to convince top target management of their project. Analysis of the best way forward for top management to participate in the envisaged acquisition is therefore of the utmost importance.

If this is your situation

• You are envisaging participating in a buy-out of the company of which you are currently a manager.
• You are in an acquisition process and need to convince management to stay on board.

How PwC can help you

• We can advice on the valuation aspects.
• We advice on top-executive rewards. This also covers advice on potential changes of work status from a legal and tax perspective and in relation to social security, and advice on supplementary pensions.
• We advice on a legal, tax and accounting level in relation to the structuring and optimisation (for both the investor and management) of management holdings in Belgium and abroad (networking with PwC experts in other countries).