Valuations, Fairness Opinions, and More — For Business in Canada and Abroad
The current deal environment is characterized by an intensified focus on accountability of the board of directors and increasing transaction structure complexity. MPA’s professionals have helped boards and special committees strengthen their fiduciary oversight and make more informed decisions by providing an independent valuation and fairness opinion based on rigorous transaction analysis and sector knowledge.
What is a Fairness Opinion
A fairness opinion is a report from an advisory team that evaluates a merger, buyback, acquisition, or other types of business purchases. This report evaluates the facts and provides an opinion on if the deal is fair for one or multiple entities involved.
The Importance of Fairness Opinion
Fairness opinions are crucial in the business world because they provide an objective opinion based on collected data and analytical expertise. These opinions provide valuable insights to buyers or sellers when they make the final decision on their merger, buyback, etc.
Since the widespread use of fairness opinions, there have been objections to the practice. For example, many analysts used questionable methodologies to arrive at their evaluations. Furthermore, conflicts of interest led to favorable valuations depending on which side of the transaction the valuation is commissioned from.
When To Obtain a Fairness Opinion
Fairness opinions aren’t necessary for every single transaction, but they are generally recommended for most deals or transactions. Fairness opinions are always obtained for public companies because of the near-certainty of a lawsuit. If your transaction is relatively small, then you may be able to forgo a fairness opinion or valuation. For most deals, it is better to have a fairness opinion rather than not.
Types of Deals That Can Benefit from Fairness Opinion
- Fair Value of Minority Interests
- Related Party Transfers
Contact The Professionals at Morrison Park
For transactions large and small, you will want qualified, solid reporting and valuation reports. At MPA, we understand how small errors in analysis can lead to massive changes in outcome. For a team solely focused on your business’ success, contact us today!