We envisioned how to maximize the advantages of a firm's buyout

Situation

Cunningham offers personal commitment and a balanced perspective to ensure our clients achieve maximum advantage. In this case, the untimely passing of a primary shareholder of a successful manufacturer resulted in the firm being left to the widowed spouse.

A team of executive managers approached the widow to purchase the shares of the company. Each party had a goal: the management team wished to minimize the external financing required to buy the shares, while naturally, the spouse wished to maximize her consideration for the shares of the company.

Solution

Acting on behalf of the management team, we structured and advised on the buyout so as to balance the needs of both parties.

To accomplish this, a series of tax-free dividends and a transfer of certain assets were made in favour of the vendor in lieu of cash proceeds. The purchase and sale of shares were executed in a tax-efficient manner, ensuring we maximized the advantages for both the management team purchasers and the spouse.