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Case Study: Financial Opinion Services
Fairness Opinion - Fiduciary Obligations
Our Client
An internationally recognized and diversified investment management firm involved in active trading, investing and research in the global equity, debt, currency and commodity markets
Situation
The firm was advising certain entities in connection with a substantial investment by such entities and the firm's affiliates to acquire a fifty percent (50%) equity ownership interest in a company. The target company was profitable, but its future value depended upon its access to growth capital in order to successfully develop and exploit certain intellectual property (IP) rights. Due to the nature of the IP rights and the structure of the investment among the firm's clients and affiliates, the firm retained The Salter Group to value the target company and to provide it with a fairness opinion in connection with the acquisition transaction.
Key Issues/Services
- Working directly with the target's management team to develop detailed forecasts for our valuation indications while negotiations with our client were ongoing
- Balancing the concerns of the target company to secure the required growth capital from our client at a fair valuation with the desire of our client to not breach its fiduciary obligations by recommending the investment on terms which would be favorable to both related and unrelated parties
- Developing indications of value to assist our client in determining the level of its cash investment for an ownership interest in the company
The Salter Group's Role & Outcome
Based on our valuation indications for the target company, our client negotiated the terms of the acquisition and, in reliance upon our fairness opinion, advised its clients and affiliated parties to invest in the company.
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