The owner of a business in the Agricultural industry had recently been approached by multiple parties seeking to partner or offering to purchase his business due to its unique capabilities in the industry.
The business had produced good returns over the years, but a sale was of little interest initially as it was never considered as an option. No thought been put into how much the business was worth, or what could potentially be achieved by entering into a sale.
After the owner was approached several times, Here Business & Wealth was engaged to assess the market and outline what could potentially be achieved for him and his business by selling it to a larger player.
Given the success of the business to date, the sale was to be for a considerable sum of money, which brought with it considerable tax consequences. By engaging us early on in the process we were heavily involved in the structuring of the transaction. Through tax minimisation strategies, we structured the transaction in a way that would eliminate almost the entire tax liability, resulting in an effective tax rate of only 2%. This would mean a massive windfall for our client if the sale were to take place.
“Through tax minimisation strategies, we structured the transaction in a way that would eliminate almost the entire tax liability, resulting in an effective tax rate of only 2%”
Proceeding with the transaction, and based on our market research, we were able to assist our client to negotiate and achieve a sale of $5 million. In addition, through our smart structuring, he was able to retain almost the entire value of the sale.
Finally, through assisting to negotiate the transaction, we were able to achieve an outcome in the very best interest of our client. Ultimately, not only did he sell his business for a record high sum and retain the maximum value of the sale, he also retained 50% ownership (and operational control) in the newly formed venture post-sale. This effectively meant he remained in charge of the business, while also extracting a portion of his original interest.