In recent years, valuation issues have become increasingly important for start-up companies due to changing IRS and financial reporting rules, as well as increasing regulatory and shareholder scrutiny, which together compound potential troubles for start-up companies.
Over the last decade there have been hundreds of transactions in the beer distribution space. The impetus for consolidation has come from the top-down strategy of the breweries and the bottom-up ambition of distributors. Like a great many things before the onset of the financial crisis, the underlying strategies compelling distributor consolidation and deal pricing made better sense then.
The market downturn of 2008 left a myriad of battered stocks in its wake. In such a difficult investment environment many investors flocked to the safe haven of so-called “recession proof” stocks. Historically, beverage stocks have been thought of as recession proof stocks.
We have compiled a library of articles written by the professionals of Mercer Capital. This library contains our most recent articles as well as older pieces for your review and information. If you cannot find the information you seek, please … Continued
In our experience as financial advisors to ESOP trustee, and as an ESOP-owned company, every ESOP situation usually has unique circumstances that require specific assessment.
From the Department of Labor: US Labor Department's EBSA to re-propose rule on definition of a fiduciary Additional time ensures strongest possible protections for retirement savers, business owners WASHINGTON – The U.S. Department of Labor's Employee Benefits Security Administration will re-propose … Continued
The establishment of an Employee Stock Ownership Plan (“ESOP”) is a complex process that involves a variety of analyses, one of which is an appraisal of the Company’s shares that will be held by the plan. The process of a business valuation is often new and challenging to first-time clients, so we thought it would be helpful to provide elaboration on Mercer Capital’s valuation process to make the experience less intimidating.
ESOP valuation is an increasing concern for Trustees and sponsor companies as many ESOPs have matured financially, demographically, and strategically. Given these and other evolving complexities, it is sometimes necessary for ESOP Trustees and the Boards of ESOP companies to change their business valuation advisor.
For many business owners, the investment in their company is their most significant asset. Shareholders of closely held businesses, particularly those on the crest of the baby boom wave, are rigorously searching for exit plans to diversify their portfolios and to plan for the next stage of life.
ESOPs are a recognized exit planning tool for business owners, as well as a vehicle for employees to own stock in their employer company. However, most business owners and their advisors are unfamiliar with how an ESOP works.
What are the typical processes of installing an ESOP? Apologies granted – but it depends. Using Mercer Capital’s own ESOP installation and process as a rough guide, let’s define who the players typically are. The extent of the process and … Continued
Mercer Capital values scores of employee benefit plans for both financial institutions and corporate clients across the nation. We present the first in a series of “Ask the ESOP Valuation Experts” in Vol. 20, Issue No. 2 of Value Added™. … Continued
The Employee Stock Ownership (ESOP) appraisal utilizes the same tools and techniques of any fair market value appraisal assignment, but with an added emphasis on analyst expertise in understanding the market, the economy, and the underlying business model for the subject company.
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Many of Mercer Capital’s clients have recognized the value of employee ownership in terms of employee loyalty and motivation as well as the numerous tax advantages to the business and maintain an Employee Stock Ownership Plan (“ESOP”). The most interesting development in the ESOP arena, however, is the increasing number of S corporations establishing ESOPs and ESOP-owned C corporations electing to convert to subchapter S status.
Mercer Capital has been engaged periodically by the U.S. Department of Labor (DOL) to review an historical ESOP transaction and offer our comments regarding the appropriateness of valuation and procedural prudence. While these are two different and distinct areas, the DOL is interested in pursuing both. Violations of procedural prudence can influence the business valuation process and its determination of adequate consideration for ESOP shares.
An ESOP is an employee benefit plan designed with enough flexibility to be used to motivate employees through equity ownership. Therefore, according to theory, ESOPs implicitly enhance productivity and profitability and create a market for stock. This enhances shareholder liquidity and provides a vehicle for the transfer of ownership, which can assist in the transition from an owner/management group to an employee-owned management team.
The duties of trustees for qualified employee benefit plans which invest in employer securities are becoming increasingly important. In light of current trends toward more complex ESOP matters trustees need to clearly understand their responsibilities and liabilities.
After years of experience listening to and working with clients and their financial advisors, as well as preparing hundreds of appraisal reports, we have learned a few general and often overlooked simple truths about ESOP appraisals. We share the following six observations in hopes that they will broaden your perspective of business valuation and possibly provide you with some “tips” to assess future appraisals you may review.
The complexity of transactions involving the use of Employee Stock Ownership Plans (ESOPs) and the rising sensitivity to fiduciary responsibilities has led many plan fiduciaries to seek the advice of independent financial advisors when important transactions occur. This article describes the role and qualifications of the financial advisor, the primary factors in the development of financial advisory opinions, and some practical issues related to the decision by the trustee to hire an advisor.
An epic corporate governance and stock valuation battle between rival siblings, fighting over a Manhattan real estate portfolio worth upwards of $100 million, generated an important ruling last week by New York County Supreme Court Justice Marcy S. Friedman.
This article relates our experience in the litigation support arena and highlights not only those services well known to attorneys, but other services that business valuation professionals can provide with which some attorneys may not be as familiar.
Having been retained for a number of significant litigation engagements over the years, Mercer Capital has had the opportunity to observe a variety of theories on the best time for attorneys to retain experts for their lawsuits.
Will the number of cases appearing before probate judges increase dramatically in the next several years – specifically estate and trust disputes as well as fiduciary cases?