The challenge

A business specialising in fire and safety compliance for commercial properties was looking to sell their group. After finding a buyer, they faced a complex situation: nearly 70 shareholders, spread across three different categories:

1. Those wanting to sell all their shares
2. Those wanting to stay on and keep most of their shares (rolling up)
3. Those wanting to sell some of their shares and roll other shares over

To maximise reward and motivation in the event of a company sale, a number of key employees had long standing equity stakes in the business, and a significant number of other employees had options to acquire shares under the business’ EMI (enterprise management incentive) scheme upon a decision to sell.

Working out the amount that each shareholder should receive, dependent on whether they were planning to retain equity stakes, was a complicated yet vital aspect of the sale.

BKL had provided accounts, audit and tax advice to the business during a period of growth. They contacted us again for advice on the deal, knowing that we have expertise in guiding businesses through all aspects of sales and acquisitions. 

What we did

Throughout the acquisition process, our deals specialists worked closely with OPROur corporate finance team devised a detailed spreadsheet, clearly showing what every individual shareholder needed to be paid depending on their choices.

This spreadsheet was easy to manipulate as further information became available: new cash-like and debt-like items could be inserted, automatically updating each person’s shareholding calculation.

Given the number of shareholders and option holders, and the staged nature of the deal, our transaction tax specialists were also involved: providing specialist advice and right level of reassurance regarding the compliance on the share and option agreements that had been implemented over a twenty-year period.