The Importance Of Independence
In transactions involving related parties or potential conflicts of interest, or mergers, acquisitions or other forms of securities transactions, financial advisory firms are often retained to advise a company and/or its owners on the fairness or other aspects of the transaction. When independent fairness and other financial opinions are required, boards of directors, special independent committees, partnerships, trustees and other fiduciaries benefit from Salter Group’s extensive experience in (i) valuing businesses, complex securities and unique intangible assets, and (ii) providing forecasting, valuation and financial opinion services in support of numerous acquisitions, financings, joint ventures and other business arrangements.
Prior to retaining a financial advisor to provide a fairness or other financial opinion, attorneys and their clients often assess the relationship of that financial advisor to the proposed transaction. For example, since greater protection may be available under the business judgment rule where an independent financial advisor is engaged to render a fairness opinion, we have observed that more lawyers are now advising their clients to obtain objective and unbiased financial opinions (whether as an independent standalone or secondary opinion) which is not prepared by the investment bank that will receive a substantial commission for structuring and closing a transaction.
The obvious concern is that a conflict of interest (even when disclosed) tends to diminish the credibility of the opinion if the transaction requires a vote of approval or is challenged in a subsequent legal action. Since we are not an investment bank, and therefore have no such inherent conflicts of interest, our objectivity provides great comfort to boards of directors, special independent committees and the legal advisors involved in a transaction. Experienced companies and banks also understand that the true value of a financial opinion is largely a function of the credentials and experience of the person who may need to defend their decisions under the scrutiny of cross-examination. By having professionals with the requisite combination of “expert witness” credentials and real world transactional experience, Salter Group is well-positioned to provide fairness and other financial opinions to our clients.