Finding The Missing Millions In MnA – Holli Moeini

Sellers lean hard toward stock deals because they think it guarantees long-term capital gains at a 20% rate, versus the ordinary income rate of 35% (or higher, depending on their bracket and state). To them, that 15-point swing feels like a haircut on the purchase price. Meanwhile, buyers often nod along, sometimes because they assume indemnifications will cover the risk, sometimes because they do not fully grasp what they are inheriting.

This is the technical truth: Asset Deal = buyer control. You pick the assets you want, leave behind the ones you do not, and get a step-up in basis for depreciation (which is a fancy way to say the buyer gets to take depreciation thus reducing taxes). You also leave most liabilities behind. Stock Deal = buyer inherits it all. Every contract, every skeleton in the closet, every risk hiding under the floorboards.

Indemnifications in the purchase agreement may soften the blow, but they do not erase the risk. Holli’s way of saying it—an asset deal buys the horse. A stock deal buys the whole barn termites and all. Even when sellers do get their “stock deal,” it is not always the tax utopia they imagine. Portions of the purchase price tied to non-competes or consulting agreements still hit ordinary income. That part is negotiable, and often misunderstood, but it is very real.

There are moments when a stock deal makes strategic sense. But the decision cannot be driven by fear, noise from a CPA, or the reflex to minimize taxes at any cost. Inside the Deal: What Really Happened One of my clients, an entrepreneur, was about to make his very first acquisition in a buy-and-build strategy so he hired a well-known boutique M&A firm. They had all the polish: the credentials, the clean QofE process, and the fancy pitch deck.

They presented themselves as the experts and I bought right in! But when the seller dug in and demanded a stock deal “for tax reasons,” the buyer ran it by his fancy broker and then forwarded me the guidance he received. It was two sentences long: “The valuation looks strong, so having it be an equity deal should be okay.

Two items to keep in mind: You will not receive the benefit of a tax basis step-up, and you will assume historical liabilities.” That was it. No context. No explanation. No conversation about how this could alter the entire risk profile of his very first deal. And . . . does any CEO actually understand the ramifications of a tax basis step-up?

That’s just high-level accounting jargon. I was mad. For a first-time buyer, that kind of thin advice is not only unhelpful—it is dangerous.

This book, or parts thereof, may not be reproduced in any form or by any means without written permission from the publisher, except for brief passages for purposes of reviews. For more information, contact the publisher at [email protected]. The views and opinions expressed herein belong to the author and do not necessarily represent those of the publisher. ISBN 978-1-967386-38-3 (Softcover Book) ISBN 978-1-967386-50-5 (Hardcover Book) ISBN 978-1-967386-39-0 (eBook) This digital document has been produced by Nord Compo. OceanofPDF.com Dedication To Adam E.

Coffey: My mentor and teacher. You believed in me, gave me a chance, and helped me find my path. I am forever grateful. To Joanna Hunt and Silversmith Press: Rare talent, rare spirit. You took my little M&A field guide and gave it wings. Your gift preserves my legacy and lifts my voice. To my family—my inspiration, my heart.

I love you all. OceanofPDF.com Contents Title Page Copyright Dedication Page Foreword Introduction Chapter 1 – The Deal Frontier Chapter 2 – Negotiating the Unseen Chapter 3 – The Art of Reading a Business Chapter 4 – Before You Do Sh*t, Calculate EBITDA Chapter 5 – What Can I Afford? Chapter 6 – The Value Chessboard Chapter 7 – PE—Turning Tricks Chapter 8 – Deal Structure: Asset or Equity?

Chapter 9 – Buying—without Buying the Farm Chapter 10 – The Dance Nobody Wants to Learn—But Must! Chapter 11 – Diligence—Judgement Day for Deals Chapter 12 – Earnouts–Marriage, Divorce, and Everything in Between Chapter 13 – Cover Your . . . Tail Insurance Chapter 14 – Long Live the Humans— The Handoff Chapter 15 – The Beautiful Chaos of Integration Chapter 16 – Run, Forrest, Run!

Chapter 17 – The Final Chapter: Game Time Holli’s M&A Survival Glossary OceanofPDF.com Foreword by Adam E. Coffey 4x Bestselling Author, Veteran CEO, and Acclaimed Expert in Private Equity & Business Growth I first met Holli at my country club for lunch. She was a new member of my Chairman’s Group and at the time, she was in between roles—an ex-CFO who had been doing M&A like me.

I could tell right away that she was highly skilled. She was also at a crossroads wondering: do I go back to the corporate world, or do I do something different? It didn’t take long for me to see the answer. I told her to hang up her shingle right away because there’s a gaping hole in the market for her skillset.

You see, when I start looking at a company to buy, the first thing I want to do is review the financial statements and apply my 30/20/10 rule. And here’s what I already know going in: CEOs don’t know their numbers. Why? Because QuickBooks doesn’t know their numbers. In all my years, I’ve never reviewed a single company with truly clean, proper financials. Not one. That’s because the entire bookkeeping world is designed for one purpose: to calculate revenue so you can pay taxes.

This is a short excerpt from the opening of “” by Unknown, quoted for review and introduction purposes. All rights belong to the copyright holders.

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