Buyer Webinar
Hear from Your Peers: Transferable Tax Credits with Hormel & Gallup
Reunion hosted a buyer-focused webinar with Jim Fleming of Hormel and Adam Fritz of Gallup. Jim and Adam shared important lessons they've learned in the transfer process, including getting internal buy-in, origination and sourcing investments, deal structure negotiations, and due diligence.
View a segment of the conversation below:
Insights from your peers:
- Secure Internal Buy-In Up Front: Align with relevant stakeholders (which often include the CFO, legal, and treasury teams) early on to establish your company's goals and risk tolerance. This internal alignment is crucial for moving quickly and decisively on potential deals.
- Negotiate Beyond Price: While price is top of mind for most buyers, other terms such as a strong seller indemnity and favorable payment timing can be equally important. Buyers also often negotiate for sellers to cover a capped amount of legal and diligence fees.
- Key Buyer Metrics Include Cash Savings, Timing of Payment and Strength of Seller: Buyers noted that the amount of cash savings and resulting impact on ETR was their primary consideration. Timing of payment is also significant to ensure there isn't too large of a "prepayment" on taxes. Finally, partnering with a strong seller is critical in the event there is an IRS challenge down the road.
- Conduct Thorough Due Diligence: Even with a strong seller guarantee, buyers must conduct comprehensive due diligence. Experienced legal counsel, and the right broker / advisor can help streamline the due diligence process and ensure proper risk mitigation.
- Monitor Legislative Changes: Tax credit transfer activity has picked up since the proposed reconciliation bill passed in the House, which gave the market confidence that there will not be a retroactive repeal of credits. However, the proposed bill will also lower tax liability for many buyers, which will impact the volume of credits a buyer can purchase.
Additional Resources
Guides and handbooks from Reunion.
Reunion Accelerates Investment Into Clean Energy
Reunion’s team has been at the forefront of clean energy financing for the last twenty years. We help CFOs and corporate tax teams purchase clean energy tax credits through a detailed and comprehensive transaction process.
