Corporate Finance
Business owners make thousands of decisions affecting the day-to-day activities of their companies. However, the most important decisions may involve selling their companies or expanding through acquisitions. Targeting prospective buyers and sellers, determining the proper process, and timing the initiative are all essential. Yet, nothing is more critical than understanding the valuation issues.
Management cannot properly negotiate and close a transaction without a good understanding of the valuation considerations. This includes: a survey of the market, including a competitive analysis; an in-depth company analysis; obtaining information on similar transactions; understanding the cost of capital in the industry; evaluating the value drivers; and assessing synergistic benefits when applicable. Quist can assist management in navigating these waters so that the negotiation of deal terms make sense.
Fairness Opinions
A fairness opinion is an opinion that a transaction is "fair, from a financial point of view." It is not an opinion that the transaction is fair from a legal point of view, nor does it determine whether the transaction is a prudent business decision. Rather a fairness opinion assists directors and shareholders in making reasonable business judgments.
It provides a board of directors protection under the business judgment rule, which requires the board meet standards of (1) due diligence, (2) independent and objective decision-making, (3) good faith, and (4) absence of abuse of discretion. A fairness opinion can minimize the risk of litigation, correct misunderstandings, and provide comfort to the board of directors and shareholders.
Solvency Opinions
When a company engages in a leveraged transaction, both debtors and creditors are concerned about the company's ability to meet future obligations. Code Section 108(d)(3) defines insolvency as the excess of a taxpayer's liabilities over the fair market value of the taxpayer's assets immediately before the discharge of indebtedness. The level of insolvency determines the maximum amount of indebtedness forgiven by a creditor that a taxpayer can exclude from gross income for tax purposes. The determination of insolvency is a valuation matter and requires the fair market value appraisal of all of the taxpayer's asserts, including tangible and intangible assets, immediately before the discharge of indebtedness.
Litigation Services
In the context of litigation, Quist provides a wide range of valuation related services from assisting counsel in the discovery process to presenting expert testimony. Our personnel hold a number of business valuation credentials and adhere to the valuation standards of the professional organizations. Our professionals are very experienced in working wiht counsel and are able to simplify and convey complex valuation concepts.