Private Equity Case Study
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.
