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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 Habit Restaurants Inc. (“Habit Restaurants”) previously terminated its TRA.
Yum Brands, Inc. (“Yum Brands“) disclosed that, in connection with its acquisition of Habit Restaurants, it made an aggregate cash payment of $53 million to TRA holders to terminate the Habit Restaurants TRA. Habit Restaurants’ TRA provided for the payment of 85% of the cash savings realized from certain tax attributes, including savings from (i) certain tax attributes created as a result of the IPO and exchanges of subsidiary units for Habit Restaurants’ stock and (ii) tax benefits attributable to payments made under the TRA.
Parallaxes views TRAs, including the Habit Restaurants 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
