Per Bureau of Labor Statistics data, businesses with between 50 to 1,000 employees generated the biggest job gains between March 2011 and March 2012. In fact, the 1.8 million jobs these firms added over that period accounted for more than half of all new jobs and more than five times the number of jobs created by companies with 1,000-plus employees.
On May 10, 2013 the SEC and IRS passed final regulations under section 336(e) that provide basis step-up opportunities for non-corporate acquirers. The new regulations provide an opportunity for a Private Equity Fund (PE) to acquire a target and receive a basis step-up and tax shield, without creating a purchasing corporation or otherwise restructuring the target prior to the acquisition. Further, a PE now has the flexibility to restructure the target such that the ongoing activity is conducted through an LLC taxed as a partnership, which would allow the fund to pass on a full basis step-up upon exit and eliminate future corporate taxation on the target’s activities. In addition, the new regulations may provide the ability to separate multiple businesses post-acquisition in a much more tax-efficient manner than previously existed, thereby allowing a PE to better align its investments.
The full article from McGladrey can be found here.