NEW YORK CITY, September 20, 2022 / PRNewswire / — 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 share a notable development in the market as Norcraft Companies, Inc. (“Norcraft”) previously terminated its TRAs.
Norcraft disclosed that after having been acquired by Fortune Brands Home & Security, Inc. (“Fortune Brands”), Norcraft terminated its TRAs by making an aggregate cash payment of approximately $44 million to TRA holders to terminate the TRAs.
Norcraft had three TRAs which provided for the payment of 85% of the net cash tax savings realized from certain tax attributes, including savings from (i) increases in tax basis attributable to the original acquisition of interests in Norcraft Holdings, L.P., (ii) net operating losses, (iii) exchanges of LLC units for common stock or cash and (iv) payments made under the TRA.
Parallaxes views TRAs, including the Norcraft TRAs, 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.
About Parallaxes Capital
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
This press release should not be regarded as representative of an official position or statement of Parallaxes or any related entity.