The proposed all-cash transaction is valued at about $10.3M, not including potential future earn outs
, for Tech-IT's estimated $20M in annualized revenue and approximately $1.5M of cash and cash equivalents.
Additional earn outs
of up to USD 55m are to be paid based on achievement of certain performance targets over next two years.
New York, NY 5/9/08 -- Enzo Biochem has acquired BIOMOL International for $15 million in cash, $3 million in unregistered stock, and earn outs
over two year.
And it is likely, based on the brief press release issued with the pre-Budget report, that earn outs
satisfied in shares/loan notes after April 5 will also be caught, according to Linda Marston-Weston, head of the transaction tax team at Ernst & Young's Birmingham office.
This includes an upfront payment of cash and common stock of USD 21.3m, as well as potential product regulatory milestone payments in aggregate estimated to be up to USD 30.0m and earn outs
based on incremental net sales growth of up to USD 26.5m.
Mr Hodgson said: 'The new guidelines on earn outs
indicate that the application of Income Tax and National Insurance will be brought to bear where the Revenue believes that companies have used earn-outs as a tax avoidance measure, for example where actual remuneration is disguised as additional consideration for shares.