Business Valuation —Appraise value of closely held businesses and equity/debt components of capital structure, conforming to Uniform Standards of Professional Appraisal Practice (USPAP). Purposes include income, estate and gift tax, buy-sell agreements, ESOPs and acquisitions/divestitures.
Intellectual Property —Conduct valuations of patents, trademarks and copyrights, accounting for market potential, competition, development costs, product life cycle and duration of protection. Utilize cost, income and market approaches.
Fairness Opinions —Evaluate fairness of terms of transactions to interested parties. Consider criterion of fair market value as affected by minority and liquidity discounts.
Feasibility Studies —Examine and analyze factors affecting return on investment to real-estate and industrial projects.
One of the most important drivers of economic growth in the United States is the process of corporate mergers or acquisitions. Many of these transactions are based on business strategies that identify market or technological gaps that can be filled more economically by a transaction than by internal investment and development.
Large organizations may be hampered from innovation by diseconomies of scale or a risk-averse corporate culture. Small, agile companies, while lacking capital resources on the same scale as large enterprises, may provide more streamlined communication, more flexible organizational structure and more lucrative incentive compensation that enables high-risk, innovative projects to be undertaken more efficiently than in large organizations. Acquisition as an exit strategy enables investors, managers and employees of the smaller companies to realize the return on their investment of human capital that leads to a successful innovation.
Companies seeking growth through acquisition must manage a number of economic issues with which we can provide essential assistance. An acquiring company must be concerned with whether the acquisition would tend to impair competition sufficiently to attract the attention of antitrust regulators or to invite lawsuits. The financial success of an acquisition depends critically on negotiating favorable terms. The financial success also depends on whether the acquisition or combination of resources is amenable to economic efficiencies that will contribute to enhanced valuation of the combined enterprise. Even when the economic prospects and financial plans are attractive, the success of a merger or acquisition often hinges on integration of the resources and cultures of the two entities after the transaction so that management is able to control the organization and effect the projected efficiencies.
We can assist acquiring companies to deal with these issues with the following services:
- Formulation of market analysis and business strategy
- Identification of technology and market gaps
- Search for and identify companies suitable for acquisition to fill such gaps
- Analysis of competitive conditions in relevant product and geographic markets
- Valuation of target candidates both pre- and post-investment
- Financial projections of integration of operations and economic efficiencies
- Evaluate alternative acquisition financing structures
- Identify and locate financing sources
- Post-Merger Integration—Identify friction points in product lines, information systems, technologies and organization and recommend lubricating solutions.