A leading high-technology materials and derivative precision components company engaged VRC to determine appropriate arm’s length royalty rates for intellectual property under U.S. IRC § 482 for Transfer Pricing. The project required identification of economic ownership, by reporting unit, of a number of intellectual property transactions between the U.S. parent company and the individual reporting units domiciled overseas, as well as transactions between the individual reporting units. The challenges for VRC were to 1) investigate global market licensing transactions of intellectual property within a narrow technology industry, 2) investigate and identify intercompany technology transfers, and 3) support the appropriate conclusions against heightened IRS scrutiny.
VRC collaborated with company management and conducted a detailed analysis of the intellectual property and the functions and risks related to each of the corresponding reporting units and the respective IP transactions in order to establish economic licensee and licensor relationships. In the final analysis, the determined arm’s length ranges of royalty rates provided a supportable basis for transfer prices between the Company’s U.S. (parent) reporting unit and multiple overseas domiciled subsidiaries.
Allocation of Purchase Price
Under ASC 805, a PPA analysis allocates the purchase price into acquired assets and liabilities
Employee Stock Ownership Plans (ESOP)
Feasibility studies, valuations, transaction design & structuring for Employee Stock Ownership Plans (ESOPs)
Financial Reporting Valuations
Valuations to make confident decisions & support evolving financial reporting standards
Annual impairment testing services supporting ASC 350 compliance, including underlying assets associated with reporting units
Intellectual Property & Other Intangible Assets
Categorized as marketing/brand, customer, artistic, contract or technology-based assets, must be valued under ASC 805 & ASC 350
International Business Combinations
Multinational firms pursuing M&A strategies face additional international financial & tax reporting requirements
IPO Readiness & Equity Compensation
Companies need valuations for various forms of equity-based compensation. Early-stage companies need a valuation health-check, pre-IPO
Support for litigation, developing & providing direct testimony, arbitration and depositions
Mergers & Acquisitions
ASC 805 & ASC 350 make it critical for buyers & sellers to consider how a transaction impacts financial reporting
NOL carryforwards are a valuable asset & ownership or equity changes can trigger a valuation requirement
When considering an acquisition, management teams need accurate valuations of the target’s assets & liabilities
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.
An industrial property consisting of various manufacturing machinery & equipment was a candidate for an ad valorem tax reduction.
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.
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.
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.
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.
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.
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.
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.
A large multinational consumer products company acquired a South American company operating in the same space. VRC was engaged to estimate the value of the PP&E and intangible assets for financial reporting purposes.
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.
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.
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.