Advanced Medical Pricing Solutions, Inc. – Tax Advice Results in Additional Cash for Selling Shareholders

Challenge

Advanced Medical Pricing Solutions, known as AMPS, helps mid-sized and large employers, health plans and municipalities reduce healthcare expenditures without negatively affecting member benefits or health outcomes. In order to continue its rapid growth, AMPS sought an infusion of capital. Arnall Golden Gregory represented AMPS in the successful recapitalization, and, in managing the tax implications, found significant savings for the company and an additional purchase price for its shareholders.

Approach

The transaction was especially complicated because of the company’s ownership structure, with numerous shareholders holding a variety of options and warrants. Arnall Golden Gregory not only minimized the shareholders’ taxes while cashing out the options and warrants, but negotiated a significant payment to the shareholders for the company’s net-operating-loss carry forwards, generated when the options were cashed out at closing. Arnall Golden Gregory made the client aware that purchasers will often pay selling shareholders for the value of net-operating-loss carry forwards and recommended that the sellers negotiate such a payment.

Result

After the transaction closed, AMPS CEO and President Mike Dendy said in a press release, “Last year AMPS grew by over 70 percent and we are on a financial track to do the same this year, and we see this strategic investment extending the significant growth we have enjoyed over the past five years.”