Challenge

A large multinational consumer products company acquired a South American company operating in the same space. The transaction was highly synergistic. The multinational believed that the target would provide a channel to distribute its proprietary products. The multinational engaged VRC to estimate the value of the PP&E and intangible assets for financial reporting purposes.

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Solution

Using proprietary models, VRC developed an estimate of the value of the PP&E and intangible assets. The intangible assets included several brands and customer relationships. Goodwill was also a significant asset given the premium paid for the target and expected synergies (that were unique to the buyer). The valuation was reviewed by management and reviewed and approved by a Big 4 auditor. The multinational presented the results of our analysis in its 10-k filing.

Consumer Products Services

Allocation of Purchase Price

Under ASC 805, a PPA analysis allocates the purchase price into acquired assets and liabilities

Alternative Asset Valuations

Complex Securities & Portfolio Valuation Services for Illiquid, Hard-to-Value Securities

Equity Compensation

Companies need valuations for various forms of equity-based compensation. Early-stage companies need a valuation health-check, pre-IPO

Fairness & Solvency Opinions

Transaction Opinion Analyses to Ensure Fairness & Financial Adequacy

Financial Reporting Valuations

Valuations to make confident decisions & support evolving financial reporting standards

Global Tax

U.S. domestic & global tax laws require valuation experts who understand the intricacies of tax reporting

Goodwill Impairment

Annual impairment testing services supporting ASC 350 compliance, including underlying assets associated with reporting units

Intellectual Property & Intangible Assets

Categorized as marketing/brand, customer, artistic, contract or technology-based assets, must be valued under ASC 805 & ASC 350

Mergers & Acquisitions

ASC 805 & ASC 350 make it critical for buyers & sellers to consider how a transaction impacts financial reporting

Pre-Acquisition

When considering an acquisition, management teams need accurate valuations of the target’s assets & liabilities

Tangible Assets: Real Estate & M&E

Valuations for real estate, real property, machinery & equipment, lifing studies and more

Tax, Compliance & Planning

Consulting & planning services to meet tax reporting & compliance needs

Perspectives

Industry Update: Aerospace & Defense

Just updated! Read VRC’s latest Industry Report on Aerospace & Defense for relevant market data, trends in EBITDA multiples, notable deals and more.

Key Points in Valuing Profits Interests

Profits Interests are valued as options, and when estimating their fair value consider the total equity framework, including vesting interests.

Chairman Czapla Quoted in 9fin: BDC Earnings – Five things to watch

BDC earnings season is upon us giving a chance for investors to look under the hood of some of the top names in private credit.

Private Equity Market Trends in Q1 2023 and Outlook for the Second Half

VRC explores a look back on 1st quarter activity, the ongoing discussions surrounding valuation methodologies, considers historical performance, and provides an outlook for the 2nd half of the year.

VRC Welcomes Senior Professionals, Over a Dozen Associates & Analysts, to Offices Nationwide

Recent new hires reflect continued growth in our business.

1Q 2023 Update: Middle Market Credit Spreads, Required Returns

Direct lenders and PE sponsors: while negatives remain, markets remain stable quarter-over-quarter.

Other Industries

Agribusiness

A leading commercial agribusiness client in Argentina was interested in selling their company, which was focused on cultivating and producing olive oil, table olives and wines.

Manufacturing

An industrial property consisting of various manufacturing machinery & equipment was a candidate for an ad valorem tax reduction.

Automotive

A client who designs, engineers, and manufactures value-added products and systems for automotive and light-vehicle manufacturers acquired an automotive components manufacturer.

Brands: Food & Beverage

A leading manufacturer of branded food products engaged VRC to estimate the fair value of certain intangible assets acquired in a business combination.

Energy

We were retained by an energy production company whose subsidiary acquired distressed energy assets from an energy & production company. In selecting a valuation methodology, we needed to consider the significant divergence in the enterprise value of the business versus the un-discounted value of the assets given the dramatic drop in commodity prices at the time.

Consumer Products

A brand valuation that estimated the fair value of intangible assets acquired in a business combination was needed by a personal care product company for the sale of its branded and private label products.

Chemical

A leading international producer of nitrogen products acquires a nitrogen manufacturing company requiring a valuation for allocation of purchase price according to ASC 805.

Oil & Gas

VRC provided a required valuation of tangible and intangible assets for a Master Limited Partnership (MLP) client in support of a purchase price allocation. There were no detailed fixed asset records; VRC needed to overcome significant data limitations.

Pharmaceuticals

In order to comply with Accounting Standards Codification 815 (ASC 815), an early stage pharmaceutical company asked VRC to analyze the entire convertible callable note and determine the fair market value of each of the embedded derivatives.

Technology

A private equity sponsored cloud based provider of manager content, enterprise lending services granted certain management incentive units to participating executives, as compensation to incentivize management performance.

Technology

A PE-sponsored cloud based provider granted equity compensation incentives to executives. To comply with financial reporting requirements of Accounting Standards Codification 718 (ASC 718), the provider engaged VRC to determine the fair value of the issued units.

Financial Sponsor: Hedge Fund

​A shareholder of a closely-held hedge fund was not receiving the appropriate level of compensation per agreement with the controlling interest shareholder.

Financial Sponsor: Private Equity

A technology company was purchased by large private equity investor. With the purchase price set, the new entity was capitalized with debt and three different types of equity securities.

Healthcare

Property taxes were levied on only real property portion of a hospital, key to analysis was separating the value of the business ops from that of real property.

Financial Sponsor: Hedge Fund

A hedge fund client held convertible note in a company that restructured outstanding debt. As part of restructure, the note was exchanged for two separate Term Loans.

Telecommunication

We were retained by a leading provider of wireless messaging and information services to provide various valuation services for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

Professional Services

VRC was asked by the attorneys representing the seller to provide multiple common stock valuations on a retrospective basis that would withstand a Big 4 audit review under tight deal closing deadlines.

Technology

A leading high-tech materials and derivative precision components company engaged VRC to determine appropriate arm’s length royalty rates for IP for Transfer Pricing.