Publicly Traded Media Company Seeks DLC Accounting Expertise for Recapitalization to Secure Shareholder Approval and Close Transaction

Overview

A $5B publicly-traded media company engaged DLC to recapitalize existing shareholder equity during an $8.5B buyout transitioning the company into employee holding through an employee stock ownership plan (ESOP).

Project Background

The DLC team led research and documentation of the appropriate accounting channels for the transaction by studying accounting pronouncements, acquisition guides, recapitalizations and ESOPs. Through their research, the DLC team met additional challenges as they discovered:

  • Private following the transaction
  • A significant debt required the company to prepare periodic filings with the SEC following the transaction, including 10-Q’s and 10-K’s
  • The company was being acquired and merged into a subsidiary of the ESOP, creating a presumption of acquisition requiring push-down accounting that needed to be overcome