Driving Value through Economic Development Incentives

To attract and retain growing businesses, state and local governments provide valuable economic incentives, which include tax abatements, payroll tax credits, infrastructure grants, low- or no-interest loans, training grants, and tax increment financing. These state and local incentives provide many opportunities for private equity firms to increase cash flow and value of portfolio companies.

Pre-Acquisition

• Due diligence: evaluating the target companies’ existing incentives to determine carry-over applicability, requirements, and associated risks
• Determining if transactions will create opportunities for new credits and incentives

Post-Acquisition

• Incentive analysis for facility consolidation/relocation, CAPEX/PP&E and workforce expansion/relocation
• Site selection
• Negotiations
• Reporting

• Adding 15 or more jobs over five years
• Buying, leasing, expanding or building a facility
• Purchasing $1 million or more in new equipment
• Acquiring or merging with another business
• Relocating operations

The following case studies demonstrate how McGuire Sponsel helps increase value and reduce costs for portfolio companies.

Peak Rock Capital/Pretzels, Inc.

Site selection and approximately $15 million in incentives to assist with a facility expansion, new equipment, and projected job growth

Compass Group Equity Partners/Tipton Mills

More than $675,000 in payroll tax credits, training grants, and property tax abatement on a planned facility expansion

• Review (transactions, purchases, relocations, expansions, etc.)
• Assess (we provide recommendations including value estimates. We provide location based information on taxes, workforce, operational costs and more that will help you make great decisions)
• Obtain Incentives (we go to work for you, maximizing value at your direction)
• Report (internal and external stakeholders receive management reports documenting value and driving great decisions)