An expert deposition is a formal proceeding. In this article, Chris Mercer presents a list of deposition preparation items from his experience both in having his deposition taken and in attending a number of depositions of other experts or parties to various matters.
In this article, Chris Mercer addresses a case with the application of a 25% marketability discount in a statutory fair value determination. The New Jersey Appellate Division issued an unpublished decision in Wisniewski v. Walsh, 2015 N.J. Super. Unpub. LEXIS 3001 [App. Div. Dec. 24, 2015]. The case is interesting in that it attempts to determine a marketability discount in relationship to the “bad behavior” of a selling shareholder.
Coming off recent years where both public and private FinTech markets were trending positively, the tail end of 2015 and the start to 2016 have been unique as performance has started to diverge. Against this backdrop, this article discusses other strategic and exit options beyond an IPO FinTech companies can consider, such as partnering with, acquiring, or selling to traditional incumbents (banks, insurers, and money managers).
On May 23, Ares Capital (ARCC) announced the acquisition of fellow business development company, or BDC, American Capital (ACAS) in a cash and stock deal valued at $4.0 billion. The deal is notable from several perspectives. First, the transaction brings closure to the ACAS saga. Second, the deal includes third-party support from ARCC’s management company. Finally, the transaction structure allowed ARCC to raise nearly $2.0 billion in new equity without diluting NAV per share, despite ARCC shares trading at an 8% discount to NAV prior to the announcement.
Managers of companies going through a Chapter 11 restructuring process need to juggle an extraordinary set of additional responsibilities, often requiring help from outside third party specialists to formulate a reorganization plan that facilitate a successful navigation through the bankruptcy court. This article provides expertise on the Chapter 11 reorganization process and emergence.
We observed last spring that 2015 would likely mark a turning point in portfolio valuations with the degree of difficulty likely to increase during the year. With Q4 earnings season beginning, we take an opportunity to check in on portfolio marks and market sentiment over the year. The key takeaway from the year is that the valuation perspectives of investors and portfolio managers began to diverge.
The valuation of sports properties is often perceived as one of the most exciting areas of the appraisal profession. Sports business mandates constitute an amalgam of traditional valuation approaches applied to a specialized industry niche possessing its own distinct value drivers and considerations.
Texas energy companies continue to cut jobs at a shocking rate. According to the Houston Business Journal, nearly 40,000 people working for three of the world’s largest oilfield services firms have lost their jobs in the last six months, and even more layoffs are anticipated in the near future. The immediate effect of job cuts on company values is undoubtedly negative. Cuts are often made in the hope that lower overhead costs and increased efficiency will eventually boost profits and, hence, the company’s overall worth.
Despite a strong year in the FinTech sector, IPO pricing is always tricky, especially in the tech space. In this article, we consider Square’s IPO and how preferences associated with shares can affect valuations.
After weak broad market performance in the first quarter of the year and slow advances during the summer, U.S. stocks generally saw amplified returns in the fourth quarter of 2015. The largest banks (those with over $50 billion in assets) generally performed in line with broad market trends, but most banks outperformed the market with total returns on the order of 10% to 15% for the year.
Valuation issues are front and center of the EFH bankruptcy. How the ultimate reorganization plan plays out will be critical. Many valuation aspects can be structured in a settlement. However, even in bankruptcy environments, there are economic, financial and market issues that still fuel the undergirding drivers to maximizing value for all stakeholders. No investor wants the short end of a stick. Depending on how the valuation issues play out there might be a chance that EFH has a long enough stick for everyone to grasp.
Anybody who has been to a gas pump in the last several months can tell you that the energy industry is currently in the throes of change. Prices are falling to lows that they haven’t seen in almost a decade and the industry itself is being impacted in a large number of different ways. The changing face of economics and the marketplace has presented an entirely new set of challenges that businesses will have to adapt to in order to thrive well into the future.
In recent court testimony, Bank of America – Merrill Lynch (“BoA”) revealed its bid book (“Project Claret”) prepared for potential buyers of a NBA franchise, the Los Angeles Clippers (“Clippers”). This article considers how the difference in local media revenues can impact a valuation of a team.
From 2000 to 2005, Major League Baseball teams were selling for much less than National Football League teams, i.e., typically under $200 million. Most of the MLB teams were showing losses at the time, and there was limited interest in buying the teams that did come up for sale. But the buying and selling environment changed dramatically in 2012, with the Los Angeles Dodgers selling for over $2.15 billion in a spirited auction with sixteen initial bidders. What has caused this explosion in MLB prices and do these high prices make sense?
When it comes to the four major league sports (NFL, MLB, NBA, NHL), the NBA and MLB have had less success in Canada vs. the USA, primarily due to demographics. With the exception of Toronto, most of the cities tend to be smaller and have fewer corporate headquarters relative to U.S. cities. Currently there is only one NBA and one MLB team in Canada, both in Toronto. However, one major league sport is thriving in Canada – the National Hockey League (“NHL”), so much that the values between the nations’ teams are hard to compare.
NBA franchise values have recently gone in an upward direction as evidenced by the Sacramento Kings’ $534 million sale in January 2013. That’s quite a figure for the 27th ranked metropolitan statistical area (“MSA”) in the country. This transaction is especially fascinating in light of the Philadelphia 76ers (5th largest MSA) selling for only $280 million just 18 months earlier. What fuels such a vast difference? We explore three issues that contribute considerably to these variances – media rights, arena lease structure, and the NBA’s collective bargaining agreement (“CBA”). Some of these factors are more within an owner’s control than others, but all of them contribute to situational changes that valuations hinge upon. We’ll also explore the tale of two transactions: the 76ers and Kings, to see why and how these factors influence the purchase price.
The bank M&A market in 2015 could be described as steady, bereft of any blockbuster deals. According to SNL Financial 287 depositories (253 commercial banks and 34 thrifts) agreed to be acquired in 2015 compared to 304 in 2014 and 246 in 2013. What accounts for the activity? In this article, we consider bank M&A trends from 2015 against the broader backdrop of M&A bank transactions.
Although farm income is projected to decline for a second consecutive year in 2015, farmers and the broader agricultural industry have had a great run since the Great Recession. The agricultural lending industry? Not so much. In this article, we consider industry trends such as growing demand for financing and steady rates, while also accounting for alternative sources of lending and implications on asset quality.
While July and August are equivalent in terms of the number of days, the market environment in these two months during 2015 bore few similarities. In August, volatility returned, commodity prices sank, and expectations of Federal Reserve interest rate action in September diminished.
Despite much commentary about the significant economic and regulatory headwinds impacting community banks, profitability is on the mend. Key contributors to improving earnings were higher net interest income and lower loan loss provisions. While it is difficult to tell whether community bank earnings have peaked and how long this cycle may last, improving profitability expands the strategic options available to community banks. Selling is one option available to community banks in this environment, but the range of strategic options available is much broader than that as discussed in our article.
During 1980 the Federal Reserve issued the Small Bank Holding Company Policy Statement (“Policy Statement”), which recognized from a regulatory perspective that small bank holding companies have less access to the capital markets and equity financing than large bank holding companies. Although the Fed has sought to limit holding company debt so that the parent can serve as a “source of strength” to its subsidiaries, especially the deposit-taking bank subsidiaries, the Policy Statement allowed small bank holding companies to utilize more debt to finance acquisitions and other ownership transfer-related transactions than would be permitted by large bank holding companies. Considering the updated threshold as of May 15, 2015, we summarize the regulation update and remark on its implications.
The petroleum industry was one of the first major industries to widely adopt the discounted cash flow (DCF) method to value assets and projects—particularly oil and gas reserves. These techniques are generally accepted and understood in oil and gas circles to provide reasonable and accurate appraisals of hydrocarbon reserves. When market, operational, or geological uncertainties become challenging, however, such as in today’s low price environment, the DCF can break down in light of marketplace realities and “gaps” in perceived values can appear.
Aside from paying tribute to the late B.B. King and playing “Everyday, everyday I have the blues,” what can community bankers do in order to combat the margin blues? While not all encompassing, we have listed a few strategic options to consider including increasing leverage, considering M&A, acquiring/partnering with non-financials, improving efficiency by leveraging financial technology, or maintaining the status quo.
In our view, Employee Stock Ownership Plans (ESOPs) are an important omission in the current financial environment. Many lack a broader understanding of the possible roles of ESOPs as a tool to manage a variety of strategic issues facing community banks. Given the strategic challenges facing community banks, we strive to help our clients, as well as the broader industry, fill this gap, and discuss some common questions related to ESOPs in the following article.