Mergers, Acquisitions, Sales & Spin-Offs

 

These transactions may include entire or partial acquisitions, divestitures, liquidations or recapitalizations. Mergers will generally require both companies to be valued, while an acquisition may require only a single valuation. The terms of the transaction may include cash, notes, stock or a combination of these forms of payment.

Closely-held companies with two or more definable divisions may be split up or spun off into separate corporations. Reasons for doing this can include estate tax considerations, family conflict or sale of only part of the total business.

In the liquidation of a corporation, the valuation analyst’s allocation of the assets distributed to the stockholders may be required to substantiate subsequent depreciation and other deductions claimed. Many publicly-traded companies have acquired closely-held businesses by using restricted stock (Rule 144 stock) as the form of payment.

Business valuations are frequently performed when:

  • One company acquires another company
  • A company is targeted for an acquisition
  • The capital structure of a company is reorganized
  • A company splits up or
  • A company enters bankruptcy.

Trugman Valuation can assist with valuations needed for these corporate transactions.