Merle Erickson, PhD
Professor of Accounting, University of Chicago Booth School of Business
General Session 4: Advanced Tax Related Valuation Issues for Privately Held Businesses
This session starts with a brief overview of common methodologies used to value privately held businesses. Next, Professor Erickson will introduce a variety of tax related issues that can materially affect the value of privately held businesses, and present several real world examples of these tax benefits, which can be worth hundreds of millions of dollars. These sources of value relate to tax structures used to acquire a private business (e.g., IRC Section 338(h)(10) election), as well as to tax attributes of the private business (e.g., the presence of tax loss carryforwards). Professor Erickson will explain how these tax related valuation issues should be factored into the valuation of a privately held business. The session will conclude with a discussion of some possible straight forward tax related exit planning strategies that arise from the material covered earlier in the session.
Merle Erickson is a professor of accounting at the University of Chicago Booth School of Business. He studies the effect of taxes on the pricing and structuring of mergers, acquisitions, and divestitures; and the use of accounting information in valuation and contracting. He also studies, among other things, various aspects of accounting fraud. He teaches “Taxes and Business Strategy” at Booth and his course has been a staple of the Booth MBA curriculum for more than two decades. In addition to numerous articles published in a variety of top academic journals, Erickson is a coauthor of the widely used Taxes and Business Strategy textbook (currently in its 6th edition) and is the author/editor of the casebook, Cases in Tax Strategy. From 2005-2011, he served as a co-editor of the Journal of Accounting Research. Over the course of his career, Professor Erickson has consulted on complex generally accepted accounting principles and tax accounting issues (e.g., debt versus equity, FIN 48 and ASC 740 related issues, intercompany accounting and consolidation, employee stock option accounting, accounting for acquisitions and divestitures, restated financial statements, etc.) in a variety of contexts (e.g., bankruptcy, mergers, acquisitions and divestitures, inversions, structured finance, investment planning, cross border and intercompany financing, partnership arrangements, tax-sharing agreements, and various types of tax-advantaged transactions). His clients have included, among others, the U.S. Department of Justice, the Internal Revenue Service (IRS), Fortune 500 companies in various industries, international financial institutions, law firms, accounting firms, and individual taxpayers. He has also assisted corporations with the Securities and Exchange Commission, IRS, and whistleblower investigations. Professor Erickson brings these real-world experiences to his “Taxes Business Strategy” and executive education courses at Booth. He has received several awards from the American Taxation Association for his research and teaching and the Outstanding Manuscript Award (twice) as well as an award for teaching innovation. In addition to teaching graduate students at Chicago Booth, Erickson has taught courses to Morgan Stanley, Merrill Lynch, General Electric Capital Corporation, Baker McKenzie, Andersen Consulting, Accenture, CareerBuilder, and Investments & Wealth Institute among others. He also has been named one of Businessweek’s Outstanding Faculty at the University of Chicago. Erickson earned a BS in accounting from Rockhurst College, an MBA from Arizona State University, and a PhD in accounting from the University of Arizona. He joined the Chicago Booth faculty in 1996.