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Middle Market Merger and Acquisition

News | January 2, 2014

A team of attorneys from Kutak Rock’s Kansas City office closed a middle market management buyout, negotiating the acquisition of an annuity and life marketing organization. 

This was the fourth middle market M&A transaction the Kansas City team has closed in the past six months. The Kutak Rock attorneys on the team included Mitch Woolery, Neil Miller, John Miller, Bill Roberts, and David Smith for tax issues and Tasha Smith for insurance issues.

This deal relied upon a tax provision (Section 336(e)) that Congress approved in 1986 but for which the IRS approved final regulations only this year. Kutak Rock was among the first law firms in the country to take advantage of these new 336(e) regulations. Section 336(e) is important because it allows sellers and buyers to treat stock sales as assets sales for federal income tax purposes. Buyers in particular enjoy additional tax advantages and improved cash flow from a so-called “stepped-up asset basis.” Section 336(e) also expands the types of buyers that can participate in these deals including many private equity groups.