How Sponsor-to-Spomsor Deal Structures Avoid Tax Blowups

The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators · Jun 13, 2026 · 12m · transcript

In this episode of The Acquisition Talk, Lucas and Luna break down the sponsor-to-sponsor transaction — an increasingly common but poorly understood deal structure where one private equity firm sells a portfolio company directly to another. They walk through the tax, legal, and strategic mechanics that separate these deals from a traditional strategic sale or an IPO exit. Using a real-world example of a mid-market industrial roll-up that changed hands between two PE firms in early 2026, they explain how a Section 338(h)(10) election preserved roughly $40 million in tax basis for the buyer…