Independent Fairness Opinion Firm

A Fairness Opinion from a disinterested valuation firm provides decision makers with an independent analysis of the transaction, unbiased by commissions and other potential conflicts.

Purpose of an Independent Fairness Opinion by a Trusted Fairness Opinion Firm:

  • Documents the results of the valuation process and the financial issues that were taken into consideration.
  • Provides the buy side or sell side fiduciaries (board of directors or board of managers) with a written opinion that the value arrived at is fair from a financial point of view.
  • Does not opine that the transaction is the best deal available, only that the subject transaction is fair from a financial point of view.
  • Provides tangible evidence that can be used in litigation to demonstrate that the fiduciaries acted reasonably and on a well-informed basis.
  • Provides transaction insight to fiduciaries from a source that is unbiased by transaction or other performance commission.

Private and public companies are referred to Marshall & Stevens by outside legal counsel and other trusted advisors to provide independent Fairness Opinions for their important transactions.

If there is a concern that even one shareholder may challenge the controlling shareholder(s), management, board of directors, or board of managers – claiming that a transaction being pursued results in unfair treatment to minority shareholders, then a Fairness Opinion should strongly be considered to protect the decision makers.

 

SPAC / de-SPAC: Fairness opinions are recommended for Special Purpose Acquisition Companies (SPACs) merger, acquisition and other transactions. Litigation activity has increased against SPAC Boards. Shareholder concerns include noncontrolling shareholders’ perceptions that SPAC Boards are looking out for their own interests with a rushed transaction at the end of the SPAC investment term.

ESOPs: For ESOP transactions, a Letter of Adequate Consideration is oftentimes requested rather than a Fairness Opinion. The two are similar in that the goal is to provide the transaction fiduciary(ies) with financial guidance from a qualified firm.

For more information on ESOP transactions, see our ESOP page.

For a more detailed overview of Fairness Opinions, see our Fairness Opinion Guide.

Fairness Opinion Valuation Firms work to assign a fair value to public and private businesses.

 

Sample Fairness Opinion Assignments:

  1. A private company was approached by multiple directors to redeem their shares. The company agreed and extended the repurchase offer to all shareholders. The company pursued a debt refinancing to assist with the repurchase. Outside counsel recommended Marshall & Stevens provide a Fairness Opinion and a Solvency Opinion.
  2. An acquisitive private company needed an infusion of capital to stay in business during an unexpected downturn. A director offered to purchase equity at a lower value than the value used to make the last three acquisitions. The resulting dilution and value concerns led outside counsel to recommend Marshall & Stevens to provide a Fairness Opinion.
  3. A middle market private company negotiated a sale of one of its divisions to a Fortune 100 company. The purchase agreement included a provision that multi-million-dollar retention bonuses be paid to specific executives who were also shareholders. A minority shareholder wanted the retention bonuses contributed to the purchase consideration to increase the purchase price for all selling shareholders. The buyer rejected the redirection of funds. Outside counsel for the seller recommended Marshall & Stevens for a Fairness Opinion.
  4. A public company purchased a minority interest in a different public company a year prior to offering to purchase the remaining interest. The buyer offered stock plus cash as consideration at the same exchange terms as 12 months prior. Outside counsel recommended Marshall & Stevens provide a Fairness Opinion to the seller.
  5. Two public companies each held a 50% stake in an intellectual property company (“IP Co.”). One entity offered to buy out the other’s interest. Outside counsel for the seller recommended Marshall & Stevens provide a Fairness Opinion.
  6. Debt holders foreclosed on equity holders of a distressed company. Equity holders were offered $0.01 each for their shares. Outside counsel for the debt holders recommended Marshall & Stevens, a trusted Fairness Opinion Valuation Firm, provide a Fairness Opinion.
  7. A private real estate investment company with a large portfolio of property held in multiple funds and a management entity wanted to pursue an UpREIT transaction prior to IPO. Outside counsel recommended Marshall & Stevens provide a Fairness Opinion.

Marshall & Stevens is a Fairness Opinion Valuation Firm that has been in the valuation business for 90 years and has substantial expertise in rendering Fairness Opinions in a wide variety of matters. Employing a high degree of thoroughness and diligence, our professionals bring a wealth of experience from backgrounds in valuation, law, investment banking, and accounting.

For more information, please contact one of the professionals listed below or check out one of our completed transactions below:

 

Fairness Opinions Contacts

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