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Parallaxes Capital Management (“Parallaxes”) is an alternative asset manager and, since 2017, has raised four funds dedicated to Tax Receivable Agreements (“TRAs”). As the market leader in monetizing TRAs, Parallaxes is dedicated to increasing the visibility and transparency of TRAs which remain an often overlooked and misunderstood asset class. In the vein of creating greater visibility into the TRA ecosystem, Parallaxes is pleased to highlight a notable development in the market as AdvancePierre Foods Holdings, Inc. (“AdvancePierre”) previously terminated its TRA.
AdvancePierre disclosed that after having been acquired by Tyson Foods, Inc. (“Tyson”), acceleration provisions under its TRA were triggered and as a result, the TRA was terminated and AdvancePierre made an aggregate cash payment of approximately $223 million to TRA holders to satisfy its obligations thereunder. The AdvancePierre TRA provided for the payment of 85% of the cash tax savings realized from certain tax attributes, including savings from (i) certain depreciation and amortization deductions, (ii) pre-IPO net operating losses, and (iii) alternative minimum tax credit carryforwards.
Parallaxes views TRAs, including the AdvancePierre TRA, as a valuable tool to reduce certain moral hazard problems and informational asymmetry inherent in a company’s public offering. TRAs help ensure that pre-IPO owners are economically aligned with new public shareholders and incentivize pre-IPO owners to pursue an IPO structure that provides the company with ongoing tax benefits. Parallaxes anticipates enhanced awareness and understanding of TRAs will drive increased market adoption.
Parallaxes Capital Management (“Parallaxes”) is the premier investment firm focused exclusively on monetizing Tax Receivable Agreements (“TRAs”). Parallaxes offers private equity sponsors, co-investors and management team members solutions to achieve liquidity, diversification and optionality from their TRAs. Parallaxes was founded in 2017 and is comprised of experienced investment professionals from leading private equity and growth equity firms. To learn more, please visit www.plxcap.com
