Valuation Advisory

As a core competency and complement to our M&A business, FON Valuation Services provides business valuation services, including intangible asset and financial instrument valuations for a variety of transaction, financial reporting, compliance, and tax purposes. We also have the requisite experience and credentials to support litigation proceedings, including quantifying economic damages and valuing a minority interest in a business.

Our clients are principally members of the financial community (i.e., lenders, private equity funds, hedge funds, and family offices), consultants, attorneys, investment bankers/intermediaries, compliance and regulatory entities, governments, and general corporate entities. These groups must establish the market value of business assets for financings, merger and acquisition transactions, or for accounting, reporting, compliance, and tax matters.

FON Valuation Services performs its valuations by taking into account numerous quantitative and qualitative factors. Our reports are rigorously peer-reviewed by senior level appraisers, who confirm the validity of the assumptions and the data before approving the documents.

The FON Valuation Services team delivers your report to you on time, as well as providing additional oversight and advisory. Our dedicated leadership will assure that communications, process execution, and quality control are properly managed. They will also be available to provide valuable insights and perspectives into your appraisal, to help you get behind the numbers and make better business decisions.

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Key Offerings

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Financial Reporting

Chief Financial Officers, Chief Accounting Officers, Corporate Controllers, and Corporate Boards rely on our experienced valuation professionals to produce complex, sophisticated, and timely valuations to assist with complying with domestic and international reporting requirements, which ensures a seamless process that withstands the requisite compliance and regulatory scrutiny surrounding this type of work.

  • Purchase price allocations (ASC 805)
  • Goodwill impairment tests (ASC 350)
  • Analysis of long-lived assets (ASC 360)
  • Stock option expense (ASC 718)
  • Fresh start accounting (ASC 852)
  • Fair value measurement (ASC 820)

Whether performing an annual goodwill impairment test or estimating the fair value of acquired intangible assets arising from a recent acquisition, we help companies satisfy financial reporting requirements in a timely and cost-efficient manner.

Given the intricacies and dynamic nature of accounting guidance and regulations, keeping up with ever-changing financial reporting standards can be quite a challenge. Our independent valuation opinions comply with American Institute of Certified Public Accountants’ guidelines. Our team is accustomed to working with the leading audit firms to provide the most cost-efficient solutions.

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Tax Compliance

FON Valuation Services has the broad technical experience to handle the following complex tax matters:

  • Section 409A valuations
  • S corporation conversions
  • Estate and gift tax valuations
  • 280G non-compete valuations

Internal Revenue Code Section 409A requires a business valuation for stock options, stock appreciation rights, and other forms of deferred compensation. Stock options issued below Fair Market Value (FMV) can result in adverse tax and accounting consequences. If the IRS determines a company has violated IRC Section 409A by issuing options below FMV, the option recipient may be liable for taxes on the value of the stock options plus a 20% penalty. In addition, the company may owe payroll taxes on the options.

Companies should perform a 409A business valuation at least annually. If the company experiences a significant event, such as a new round of financing, or if the company is approaching a significant value creation event, such as an IPO, more frequent valuations may be required.

The valuation of common stock also is used for GAAP financial reporting purposes. ASC 718 requires companies to record the expense associated with share-based compensation, which necessitates a business valuation. The annual business valuation is a valuable strategic planning tool that allows management to track changes in the company’s value drivers that impact overall value from year to year.

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Equity Incentive Plans

Equity incentive plans can be structured in many different forms, from formal employee stock ownership plans (ESOPs) to phantom stock plans. FON Valuation Services has extensive experience performing business valuations for a variety of equity incentive plans. These business valuations are undertaken for financial reporting (ASC 718) and income tax (Section 409A, etc.) purposes.

We are uniquely positioned to serve as an integrated provider of ESOP services through every stage of an ESOP’s life cycle. Typical engagements include:

  • Pre-ESOP planning (strategic alternatives, feasibility studies, preliminary valuations)
  • ESOP formation (transaction structuring and negotiating, initial valuations, fairness and solvency opinions)
  • ERISA Compliance (annual valuations, loan restructurings, trustee advisory, litigation support and testimony)
  • Exit (merger & acquisition advisory, recapitalizations, ESOP terminations, fairness opinions)

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Litigation Support

Issues such as intellectual property values and complex financial matters are combining with the economic uncertainty and increasingly litigious business climate to make litigation support services more important than ever. Our senior professionals have extensive experience in the litigation support area.

Dispute Resolution

FON Valuation Services provides detailed expert reports, reviews and critiques, opposing expert reports, consults with legal counsel, and other experts regarding deposition and trial preparation, and gives expert witness testimony. Because of our experience and quality reports, attorneys and judges feel comfortable relying on our opinions when making critical decisions in difficult litigation matters. Our valuation dispute services are primarily, but not exclusively, used for

  • Fraudulent Convergence
  • Bankruptcy (reorganization and liquidation)
  • Financial opinions (Fairness and Solvency)
  • Mergers and acquisitions
  • Collateral Valuation
  • Intellectual Property Disputes
  • Shareholder disputes
  • Tax disputes
  • Family Law Matters
  • Cram-down situations
  • Lost profits
  • UCC sales
  • Other commercial disputes
  • Buy/sell agreements

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Transaction Opinions

FON Valuation Services provides objective and unbiased fairness and solvency opinions to boards of directors, special committees, trustees, investors, and other fiduciaries to facilitate informed decisions. Our opinions are used for a variety of situations. We also provide opinions on fair value for investments not regularly traded in public markets and in general all manner of illiquid investments.

We leverage our considerable experience to assist clients in making sound, reliable decisions in completing their complex transactions. Our independent advice withstands the scrutiny from shareholders, bondholders, various regulatory agencies, and other counterparties to a transaction.

Our financial opinions include:

  • Fairness Opinions
  • Solvency Opinions
  • Capital adequacy opinions

These opinions facilitate informed decisions in connection with:

  • Mergers and Acquisitions
  • Related-Party Transactions
  • Privatizations
  • Dividend Recapitalizations
  • Sale and Divestitures
  • Various Financings
  • ESOPs

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Transaction Advisory

FON Valuation Services leverages its combined valuation and M&A expertise to provide niche transaction advisory services. On behalf of buy-side clients, our team performs valuation due diligence to assess the value of acquisition targets and formulate the valuation terms in letters of intent. In addition, we utilize our technical expertise and experience to develop tailored business and forecasting models for our clients.

Experience


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