Financial Opinion Services
Our financial opinion services practice serves both public and private companies engaged in merger and acquisition transaction due diligence. We develop fairness opinions, solvency opinions, adequate consideration opinions, and fair market valuation opinions. Company boards of directors rely on our work to assess the total review of a transaction from a financial point of view.
In general, there are no specific guidelines as to when to obtain a fairness opinion. However, it is important to recognize that boards of directors are required to act in the best interests of their corporate shareholders. Therefore, boards of directors often seek outside assurance that their actions are prudent.
There are a few questions that corporate fiduciaries will likely need to consider:
- Will the contemplated merger and acquisition transaction create or destroy shareholder value?
- Is the value of the target assets or equity interests fair from a financial point of view?
- How does the value of noncash consideration, such as equity, seller notes, earnouts, options, and other complex financial instruments, affect the negotiated transaction value from a financial point of view?
- How do risks, synergies, and other growth opportunities affect the transaction economics?
- What is the financial impact of the transaction to current equity holders—is it accretive or dilutive?
- How do the transaction structure, transaction taxation considerations, and transaction agreement contingencies affect the negotiated deal value?
Our solvency opinions provide essential information and assurance to lenders, business partners, investors, and board members when faced with a transaction, such as an acquisition, restructuring, or recapitalization. We act as independent financial advisors on our solvency opinion work. We typically provide solvency opinions to address corporate value and estimate cash flow needed to service a company’s debt obligations.