Deals Case Studies: Caxton-Iseman Capital LLC

Caxton-Iseman Capital LLC

acquired

KCP Income Fund

tax structuring, due diligence and valuation advice provided to buyer by
PricewaterhouseCoopers

Issue

Caxton-Iseman needed Canadian and US income tax due diligence and structuring advice in respect of their purchase of KCP Income Fund ("KCP"). KCP had operated a private label bleach and consumer products manufacturing business in both Canada and the US, and had a complex cross-boarder income fund structure that was unsuitable to Caxton-Iseman as its continuing tax structure.

PwC approach

PwC provided Canadian and US tax due diligence services, tax modelling, and Canadian and US tax structuring services. These were focused on reorganizing KCP's legal and tax structure to be suitable for the client and its investors. PwC provided valuation services in support of the tax planning, and was subsequently also engaged to value the intangible assets associated with the acquisition for financial reporting purposes.

Client benefits

The client was able to restructure the acquired business into a tax framework that minimized the inefficiencies that existed within KCP's income fund structure for its new owners, and manage certain tax risks associated with the acquisition and post-acquisition restructuring transactions. The valuations prepared provided the client with independent, credible reports to deal with potential scrutiny from tax authorities, regulators and auditors.

PwC Specialist

David Klassen (CA, MBA) is a partner in our Mergers & Acquisitions Tax Practice. David's area of expertise is Canadian acquisition tax due diligence and transaction structuring. David has extensive experience in the income trust taxation and has assisted a number of clients acquire Canadian publicly traded income funds.

Wesley Mark (CA, CBV) is a partner in our Transactions Advisory practice focused on providing valuation-related services, including for tax planning/restructuring, financial reporting, and M&A purposes. He has provided extensive financial, valuation and other strategic advisory-related services to enterprises in a wide variety of industries and countries in North America, Asia-Pacific and Europe.