Valuation and fairness opinions

Companies often require an independent assessment of value with respect to a planned merger or acquisition, public offering, or transference of a privately owned business. Our evaluation of complicated transactional forms – including multi-currency mergers and acquisitions, tender offers, spin-offs, and transactions involving competing offers – while theoretically rigorous, is grounded in the real world of the capital and change-of-control markets.

We are experts at valuing the enterprise and its constituent parts. Our assessment of value with respect to the fair pricing of common stock, convertible and preferred securities, warrants, options, debt and lease instruments, and partnership interests, is comprehensive and analytically rigorous. Our principals are also experts at the valuation of intangible assets, including customer lists, trademarks, copyrights, brands, patents, licensing agreements, and marketing and distribution agreements.

Fairness opinion

A fairness opinion provides a board of directors a third-party evaluation of a proposed transaction, empowering that board to make an informed decision that is in the interests of all of its constituents. An independent analysis also establishes for the record that fiduciaries have adequately considered the proposed transaction and potential alternatives, and have properly exercised good business judgment. Our principals have rendered fairness opinions on a variety of domestic and cross-border transactions, including a complicated, multi-currency exchange of shares between a state-owned company in the Philippines and a U.S. manufacturing firm.

Section 409A valuation

With respect to the valuation of stock subject to stock rights, IRS Code Section 409A provides that a determination of fair market value be considered reasonable in the event that (1) a determination of value was undertaken by independent appraisal as of a date no more than 12 months prior to the transaction date; or (b) that the valuation is of “illiquid stock of a start-up corporation”, is reasonable, made in good faith, evidenced by a written report, and takes into account certain relevant valuation factors. This presumption of reasonableness is rebuttable only in the event that the IRS demonstrates that the valuation method utilized, or its application, was “grossly unreasonable.” The rendering of Section 409A valuations, particularly with respect to early-stage technology and other IP-oriented firms, represents a significant percentage of our valuation practice.

SFAS-142 conforming goodwill impairment testing

With the elimination of pooling of interest accounting and the amortization of goodwill in the U.S. in 2001, firms are now required to undertake periodic impairment testing with respect to goodwill and other intangible assets. Our SFAS-142 conforming goodwill impairment valuations are rigorous, defensible and have withstood the scrutiny of the IRS and other agencies of the Federal government.

SFAS-141 conforming intangible asset valuation

We assist our buy-side clients and their auditors in allocating purchase price to acquired identifiable and unidentifiable intangible assets, consistent with the directives of SFAS-141. Such intangible assets include, but are not limited to customer lists, contracts, license agreements, trade names and trademarks, patents, in-process research and development, license agreements, and non-compete agreements.