Private equity deals - joint venture structuring
The issue
Our client is a major private equity house willing
to establish a joint venture structure with a financial
partner in order to acquire a multinational industrial
group.
The acquisition structure was aimed to achieve the
following:
- Introduce shareholder debt and obtain tax relief
on any interest thereon;
- Create flexibility for future partial sales and
re-financing and also the ultimate exit;
- Minimise any upfront tax cost for the client and
any ongoing tax leakage;
- Provide a structure allowing our client and joint
venture partner to invest in a tax efficient way
from their respective view (as needs and constraints
were different).
Our Approach
The client wanted a lead private equity deals advisor
with strong technical and project management skills
to reduce risk in a very complex project and save
time, cost and coordination effort. The client was
confident that we would be able to deliver the wide
breadth of services that the project would require,
including advising on any tax aspects of the acquisition
taking into consideration the commercial background
underneath.
We started by collaborating very closely with other
PricewaterhouseCoopers offices and lawyers so to propose
to the client an acquisition structure after due consideration
of the commercial, legal, tax and funding constraints
existing in the various jurisdictions involved.
Our specialists worked then very closely with the
legal advisers of the client and of the joint venture
partner to implement the agreed option.
Finally, we provided the client with a structure
report summarising all benefits of the structure and
giving guidance as to how structure should be managed
going forward and which post-completion steps needs
to be taken and when.
The Outcome
At the end of the project, the client had a flexible
joint venture acquisition structure, which fulfilled
all of the objectives set out above and has valuable
advice as to how to efficiently manage the implemented
structure.
