Maximizing Unit holder Value The income trust structure was best suited for mature businesses with high stable cash flow and low capital expenditure requirements, where the principal objective was to maximize distributions to investors. The unit prices of many income trusts have declined significantly as a result of reduced distributions and changes to the Canadian tax law. Changes to the tax law limit the growth potential of many income trusts and may result in higher corporate level taxation in the near future. Trustees are facing critical decisions on how to maximize unitholder value including whether to solicit buyers or to reorganize as a publicly traded corporation. |  |
Since 2006, a significant number of businesses have converted out of the public income trust structure. For remaining businesses operating under the public income trust structure, the time to act is now. RSM Richter can help.
The challenges posed by either a divestiture process or a conversion are significant and complex, making the advice of an experienced, trusted and impartial financial advisor an imperative.
RSM Richter has proven experience providing financial advisory services to several long-term income trust clients. We have helped take these clients through the IPO process, have assisted them in conversions into - and out of - the income trust structure and advised on the divestiture process.
RSM Richter can act as a financial advisor to income trusts by assisting them with:
- valuation of the income trust
- identification of alternative structures
- analysis of potential structures through financial projections and modeling
- assessment of the income tax implications of proposed structures
- providing fairness opinion of a proposed transaction
- identification of potential buyers