An appraisal fairness opinion is an expert assessment of the fairness of the value of a company, a security, or an asset. It is usually prepared by an independent financial advisor or an investment bank and is typically requested by the board of directors or management of a company when the company is considering a merger, acquisition, or other significant transaction. The Fairness Opinion provides the board of directors with an opinion on whether the consideration to be received in a transaction is fair from a financial point of view.
Appraisal Fairness Opinions, Appraisal Rights, Appraisal Arbitrage, Contribution-in-Kind Reports, and other transactional opinions document, evidence and support that a transaction is either financially sound and commercially reasonable or it is not.
Appraisal Fairness Opinions require highly-trained—highly-skilled—highly-credentialed discipline specific and multi-disciplinary valuation experts with decades of experience to provide objective, credible, authoritative and well-supported opinions to show that a Board of Directors and other fiduciaries have or have not acted prudently and have met their regulatory requirements and other obligations to operate in the best interests of the shareholders and other stakeholders as to whether or not to proceed with a particular transaction.
The expert will consider various factors when providing the opinion, such as the current market conditions, the financial performance and prospects of the company, the performance of similar companies, and any other relevant information. Additionally, it will consider the methodologies used to value the company and the assumptions made by the valuer.
The Fairness Opinion is usually based on a thorough analysis of the company’s financials, market conditions, and other relevant information. It is a significant document that can be used by the board of directors to support their decision-making process and to demonstrate to the shareholders that they have acted in the best interests of the company.
EDS valuation experts are internationally accredited American Society of Appraisers (ASA), Royal Institution of Chartered Surveyors (RICS), and Appraisal Institute (MAI) appraisal instructors—all well-published luminaries in the global valuation community. They include Uniform Standards of Professional Appraisal Practice (USPAP) and International Valuation Standards (IVS) and RICS ‘Red Book’ instructors, Value Adjustment Board (VAB) Magistrates, and former state/federal appraisal regulatory compliance officers whose independent professional opinions have allowed our global clientele to prevail in billions-of-dollars at issue in courts and tribunals and alternative dispute resolution throughout-the-world.
Typical transactions involving Appraisal Fairness Opinions, Appraisal Rights, Appraisal Arbitrage, and Contribution-in-Kind Reports include Mergers and Acquisitions, Appraisal Rights / Dissenting Stockholder / Appraisal Arbitrage, Leveraged Buyouts, Managed Buyouts, ESOP-Related Transactions, Corporate Reorganizations, Corporate Divestitures, Bond Indentures, Joint Ventures, Financial Restructuring, Affiliated Transactions, Going-Private Transactions, and major leasehold and capital asset expenditures.
Our Appraisal Fairness Opinion process includes comprehensive due diligence, valuation of the company, including specific valuation of equity classes or debt securities, valuation of the consideration if other than cash, assessment of the fairness of the proposed transaction price, from a financial point of view, by comparing the indicated range of fair value to the analysis of the transaction strike price, the process is undertaken by the Board of Directors, the structure of the transaction, the likelihood of transaction closing (e.g., public relations, political, regulatory, financing and other considerations), thorough analysis and assessment of the offer and the opportunity to improve terms, and the form and likelihood of realizing the consideration.
Our Valuation and Advisory Services Group is headed by Executive Managing Director Steven N. Siegler, ASA, FRICS. Mr. Siegler is an Accredited Senior Appraiser (ASA) and was honored to serve as the founding International Chairman of Appraisal Review and Management (ARM) for the American Society of Appraisers from 2002-2011. Mr. Siegler co-authored and directed the development and implementation of the ASA’s Appraisal Review and Management Principles of Valuations series of courses and best practices that are now taught to professional valuers, government officials, legal experts, and many others throughout the world.
When, as part of Dodd-Frank, the Federal Deposit Insurance Corporation (FDIC) acting for and on behalf of the U.S. Federal Reserve and all inter-agency regulators sought the expertise to develop, implement and monitor the new National Appraisal Ordering and Appraisal Review Protocols for the United States and all U.S. territories, it came to Mr. Siegler and EDS.
Mr. Siegler holds international valuation accreditation as Fellow, Royal Institution of Chartered Surveyors (FRICS), and he is the only RICS accredited expert witness in the United States and the Americas—one of only a handful of such expert witnesses in the world holding the much-coveted RICS Expert Witness Accreditation Service (EWAS) Certification.
Mr. Siegler holds TS Clearance with the U.S. Government and he is uniquely qualified to practice before U.S. Government agencies in national security-related valuation and in other special matters.
Steven is an Elite-Rated member of the peer-voted Super Appraisers® Global Network of internationally-recognized valuation expert witness testimony luminaries. He has served as an expert witness valuer in U.S. state and federal courts, at international tribunals, and in valuation-related Alternative Dispute Resolution and he has personally prevailed in billions-of-dollars at issue in some of the world’s most important—high-profile—and valuable valuation-related cases.
EDS Appraisal Fairness Opinions, Appraisal Rights, Appraisal Arbitrage, Contribution-in-Kind Reports, and other such transactional opinions are independent and objective and render credible findings that will withstand scrutiny and challenges from regulatory, judicial, and taxing authorities.
We would welcome the opportunity to bring this level of Appraisal Fairness Opinion expertise to you.