Second Fairness Opinions

The fairness opinion states that a transaction is fair from a financial point of view of the subject company’s shareholders. The opinion does not express a view about where a security may trade in the future; nor does it offer a view as to why a board elected to take a certain action. Valuation is at the heart of a fairness opinion, though valuation typically is a range concept that may (or may not) encompass the contemplated transaction value.

Dividend Recaps Can Unlock Value

Dividend recaps can be an attractive transaction for a board to undertake to unlock value, especially since multiples for many industries have recovered to pre-crisis levels while borrowing rates are very low and most banks are anxious to lend. In addition, dividend recaps allow privately held businesses to convert “paper” wealth to liquid wealth and thereby facilitate diversification.

Your Business Will Change Hands: Important Valuation Concepts to Understand

In this article, we provide a broad overview of business value and why understanding basic valuation concepts is critical for business owners. Why is this valuation knowledge important? Because businesses change hands much more frequently than one might think. In fact, every business changes hands at least every generation, even if control is maintained by a single family unit.

The Importance of Fairness Opinions in Transactions

A fairness opinion is provided by an independent financial advisor to the board of directors of selling companies in many transactions today, especially those with a significant number of minority shareholders.

Valuation of Contingent Consideration in M&A Transactions

Companies often use contingent consideration when structuring M&A transactions to bridge differing perceptions of value between a buyer and seller, to share risk related to uncertainty of future events, to create an incentive for sellers who will remain active in the business post-acquisition, and other reasons.

Opportunities Amid Uncertainty

We are living in an uncertain world. Business owners must carefully consider the current uncertainties in order to position their companies (and themselves) optimally for the future.

Private Initial Offerings

An initial private offering (IPO) is an offering of private company stock to the investing public through the regulated, public securities markets. For rmany reasons, the IPO route to shareholder liquidity or growth capital is unavailable to most private companies.

Reflecting on the Value of Your Business

It is important for business owners to understand the factors that influence value in both the general economy and the acquisition market. This is certainly necessary for owners who are currently considering the sale of their business or may consider such a transaction in the near future.

Fairness Opinions

As part of our transaction advisory and consulting services, Mercer Capital is often called upon to provide fairness opinions in transactions.

The Importance of Reflecting on the Value of Your Business

Many business owners have not done a great deal of thinking about the value of their businesses. When we talk to these business owners about potential transactions, they often have no (or an unrealistic) notion of the economic benefits associated with their ownership interest in the business.

Why Do Good Deals Go Bad?

Corporate mergers and acquisitions are typically announced in a press release that expresses the enthusiasm of both the purchaser and the target. Like any wedding, a deal is an event that results in a great deal of excitement on the part of both participants, as well as a great deal of speculation on the part of those familiar with the union about whether or not it is a wise decision. And, like many marriages between a man and a woman, a significant number of corporate marriages result in disappointment for all involved.

Convertible Securities

Convertible securities, comprising convertible debt and convertible preferred stock, represent a hybrid ownership interest combining features of both “straight” debt and common equity.

Financial vs. Strategic Buyers

The terms “Financial Buyer” and/or “Strategic Buyer” frequently arise in discussions about investment banking activities, particularly when discussing the sale of a business. This article describes some of the characteristics of each type of buyer, and briefly discusses potential situations in which one might be more appropriate than the other.

Cash Flow Definitions

Acquirers of non-financial services companies tend to focus on various definitions of cash flow and value.