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July 11, 2012
martinwolf analysis
Capital Gains Tax Changes Affect Sellers

The capital gains tax rate is scheduled to increase on January 1, 2013. What you may not be aware of is how this increase will materially affect business owners contemplating a sale during the next 12-18 months. Industry analysts at martinwolf developed several tax scenarios that business owners could face in 2013, and compared them with average growth rates in various IT services and tech-enabled BPO sectors (as tracked by the MW Scoreboard®).

The final analysis was compiled into a white paper and available here. In researching this paper, martinwolf drew the following conclusions:
  • Absent Congressional intervention, it is possible that the effective tax rate for capital gains will increase for high-income earners to 25 percent in 2013.
  • This would result in a material difference in the net proceeds before state and local taxes. For example, proceeds for a company valued at $50 million could drop from $42.5 to $37.5 million.
  • At current industry growth rates, company owners seeking to sell after 12/31/12 may be delayed up to two years before their valuation increases enough to offset the higher taxes.
  • See our website for more information, or contact Anthony Lembo at alembo@martinwolf.com for examples and scenarios tailored to your company.

Please click here to read the white paper.

 

To learn more about martinwolf contact Matthew Putzulu at mputzulu@martinwolf.com.  

About martinwolf    

 

     San Ramon Office          
             San Francisco, CA                                                Bangalore, India

With offices in San Francisco and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 115 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.

   

June 15, 2012

glendonTodd Capital LLC announced that it acquired Aztec Systems, a leading provider of enterprise technology solutions to hundreds of U.S. middle-market companies. Aztec was represented by martinwolf in this transaction. Aztec, a member of Microsoft's Presidents Club, was recently ranked 27th in revenue on Bob Scott's 2012 Top 100 VARS list and serves more than 700 middle-market clients. Terms of the transaction were not disclosed. Please click here to view the announcement.

 

December 1, 2011

Softchoice Corporation (TSX: SO) announced it has it has fulfilled its regulatory requirements under the Competition Act and has now completed the acquisition of substantially all of the assets of UNIS LUMIN, one of Canada's most highly regarded Cisco networking and managed services companies. Softchoice was represented by martinwolf. The acquisition strengthens Softchoice's professional services capabilities while providing the technology foundation to support the Company's future cloud offerings.

Please click here to view the announcement.   

 

September 30, 2011

SPS, a leading Unified Communications Provider, announced that Court Square Partners has made an investment in the company. martinwolf advised SPS in this transaction. SPS is a premier unified communication services integrator, ranked 131 on the 2011 VAR 500 list with 2010 sales of $143 million. Court Square is a $4B+ New York-based PE Group, with more than 150 lifetime investments. Please click here to view the announcement. 

 

© martinwolf 2012

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