Business Valuation
Properly Assessing the Value of a Business Enables Strategic Planning, Tax and Estate Planning, Buying, Selling, or Refinancing a Business
Whether you’re developing business and financial plans, seeking funding to grow to the next level or selling your business, the success of those initiatives hinges upon a well informed and robust business valuation. Business valuation is at the core of all transactions.
Determining Fair Value With a Critical Eye
Determining a fair market value of your business requires specialized knowledge, in-depth insight, analytical skills, and an objective viewpoint—ideally, backed up by years of experience. Few businesses have access to such resources internally. Clients turn to GlassRatner to help them develop informed, thoughtful, and theoretically sound valuations.
Solvency Opinions
A solvency opinion provides a level of assurance or reassurance to stakeholders in a transaction as to whether or not an entity is solvent before and/or after the consummation of the transaction. In addition to mitigating legal and financial risks, solvency opinions provide an additional layer of due diligence related to a leveraged transaction, providing evidence of good faith on the part of the company and helping to establish trust between lender and borrower.
Fairness Opinions
Boards of companies, shareholder groups, bondholders, lenders and other parties may desire a fairness opinion in order to help protect their investments and thwart legal liability. The advisors assess the fairness of a proposed merger, acquisition, buyback, spin-off, privatization or other major transaction from a financial perspective. While there is no legal requirement to obtain a fairness opinion when pursuing a transaction, a company’s board has a fiduciary duty to the shareholders and therefore, is advised to seek a fairness opinion as part of discharging its fiduciary duties by acting on an informed basis.
Fairness opinions enhance decision making by providing context and highlighting potential implications that incentivized participants in the transaction may overlook. A fairness opinion demonstrates to shareholders and other stakeholders that board members are exercising prudence and care when contemplating a transaction, thereby mitigating certain risks of a shareholder lawsuit.
We have years of experience helping companies in transition understand and realize the maximum value of their assets. Our fairness opinions offer judgment beyond a calculation. We develop a unique and objective analysis for each transaction that assists boards in fulfilling their fiduciary duties and allowing for all parties to proceed with confidence.
Purchase Price Allocation
A purchase price allocation (PPA) allocates the purchase price to assets and liabilities acquired in the transaction. Potential assets include working capital, personal and real property, and intangible assets. Our team has helped businesses conduct over a thousand PPAs for them to report the opening balance sheet at fair value and satisfy generally accepted accounting principles (GAAP) requirements.
We collect historical and projected financial statements, fixed-asset listings, quality-of-earnings analyses and other data to create a complete picture of a company’s value that satisfies auditors, lenders and investors. GAAP and the Financial Accounting Standards Board (FASB) require a timely PPA. Understanding the correct opening fair value is crucial not only for compliance purposes, but also affects all future financial accounting, including earnings and balance sheets.