Complex International Restructure – Valve & Piping Manufacturer
I was instructed to advise on the restructuring of a long-established, family-owned valve and piping manufacturing business, which operates internationally through a group of subsidiaries.
One of the group’s subsidiaries was based in Texas, USA, and was partly owned by two US-based shareholders. The family shareholders had made the decision to sell this part of the business to the US shareholders while retaining ownership of the remaining group companies.
To achieve this, we needed to carefully separate the US business from the wider group, while ensuring both legal and tax efficiency across multiple jurisdictions.
The restructuring was carried out in stages. First, we reorganised the corporate structure to move the US subsidiary under its own separate parent company. This allowed us to ring-fence the US operation from the rest of the group.
We then carried out a capital reduction demerger to formally separate the US business from the remaining group companies. Once this was in place, we were able to proceed with the sale of the US entity to the minority shareholders already involved in that part of the business.
Crucially, as part of the transaction, we negotiated an agreement that allowed both sides to continue working together commercially. This helped to preserve valuable business relationships and ongoing cooperation between the newly separated businesses.
The deal itself was highly complex and took over a year to negotiate and complete. It required careful coordination of multiple stages, with input from advisers in both the UK and the US. The tax aspects were particularly involved, requiring advance clearances from HMRC for both tax and stamp duty relief. The tax clearances were handled by the company’s accountants, while I led the negotiations with HMRC on the stamp duty elements.
This transaction successfully achieved the family’s commercial objectives while protecting the long-term stability of the wider group. I continue to support the family and the business with ongoing corporate matters as they build on this solid foundation.