Empire Global professionals perform a variety of business valuations, including fairness opinions (ASC 820), goodwill (ASC 350 and 360), intangible property valuations, and stock options and warrant valuations (ASC 718).
Companies require independent assessments of their worth for a variety of reasons: to go public, merge with a partner, acquire a business, redeem shareholders’ interests, determine tax liabilities, assess collateral values, configure buy/sell equity incentives, structure ESOPs, and reorganize family-owned businesses.
Empire Global’s ability to understand and determine the value of a company has been the cornerstone of the firm’s services and its core expertise since its founding. Valuation professionals at the firm combine a powerful assortment of analytical tools with real-world experience to objectively determine corporate worth in today’s demanding marketplace.
When companies undergo leveraged transactions, they are routinely scrutinized by stockholders, lenders, regulators, and the Internal Revenue Service. A solvency analysis by an independent expert allows the company to evaluate its financial status following the close of a proposed transaction. It may also help protect the company or its secured lenders, directors, and advisors from potential liability relating to fraudulent conveyance claims.
Empire Global provides companies with an unbiased analysis of pending transactions for the purpose of determining the financial fairness of such transactions. The comprehensive analysis, including thorough assessments of the proposed transaction as well as alternatives, allows clients to make informed decisions. The resulting opinion will provide reasonable assurance that the client is acting prudently and exercising sound business judgment.
Empire Global’s extensive valuation knowledge together with its vast transactional experience provide clients with the expertise required to assess complex situations encompassing virtually every type of change of control transaction, including affiliate and insider transactions, concurrent mergers and tender offers, spin-offs, synergistic mergers, as well as transactions with competing offers.
Empire Global specializes in valuing companies and their underlying securities including common stock, convertible and preferred securities, warrants, options, various debt instruments, and partnership and limited liability company interests. Empire Global is adept at situations that involve challenging and unusual circumstances.
The firm is also expert at valuations involving structured and complex assets and liabilities, and assessing intangible assets such as film, music and video libraries, professional sports team contracts and franchises, copyrights, patents, licensing agreements, and marketing and distribution agreements.
In 2001, the Financial Accounting Standards Board (FASB) issued SFAS 141 and 142 regarding accounting for business combinations and intangible assets now called Accounting Standards Codification (“ASC”) 350 and ASC 360. The new rules which became effective on July 1, 2001, prohibit the pooling of interests method of accounting and eliminate goodwill amortization. Under the new rules, goodwill will remain on the balance sheet but must be tested at least annually for impairment in a two-step process. Companies must allocate intangibles and goodwill to each reporting unit for impairment testing.
The first step (Step 1) of a company’s impairment test is required to be completed within six months of its adoption of the new FASB rules. It requires a determination of the fair value of each reporting unit and then a comparison of that fair value to the carrying value of the assets of the reporting unit. If the carrying value exceeds fair value, the reporting unit fails the Step 1 test and must conduct a second test (Step 2). Step 2 which requires the valuation of all intangibles, including the implied value of goodwill, must be undertaken within the next six months. Goodwill impairment is the difference between the fair value and carrying value as determined in Step 2. Goodwill impairment resulting from the transitional test will be treated as a change in accounting principle, whereas subsequent losses will be charged to operating earnings.
We believe the firm’s extensive experience in performing enterprise and intangible asset valuations creates unparalleled qualifications for goodwill impairment analysis.
Intangible Asset Valuations
Valuations are frequently required for financial reporting purposes, in connection with an acquisition or to provide lenders with additional support for financing. Empire Global provides valuations for a variety of intangible assets, including patents, know-how, trade names and trademarks, developed technology, in-process research and development efforts, customer lists, contracts, non-compete covenants, and license agreements. Empire Global provides specialized intellectual property valuation services across the corporate spectrum. The firm has particular expertise in technology, including the Internet, telecommunications, cable, hardware and software, medical devices biotechnology, and life sciences.
Empire Global provides independent and well-supported valuations of intangible assets, with fast turnarounds, to enable clients to meet their deadlines. Empire Global valuation experts stay abreast of changing regulations and sensitivities of the Securities and Exchange Commission and the Financial Accounting Standards Board. This knowledge allows the firm to address material issues in due diligence and to provide supporting documentation, often significantly expediting the review process and reducing the number of SEC comments regarding our valuation conclusions.
Dispute Analysis and Litigation Support
The clear communication of intricate business issues and financial theories to a judge and jury can be the decisive element in prevailing at trial. The dispute analysis professionals at Empire Global have testified as expert witnesses in a wide range of disputes, including wrongful death, breach of contract, business interruption, post-acquisition disputes, shareholder disputes, dissolutions, breach of fiduciary duty, and estate and gift tax valuations.
Our proficiency in this contentious arena is due in part to the ability of Empire Global professionals to expand testimony beyond theoretical models by contributing real world experiences, insights, and anecdotes.
Here again, the firm’s professionals combine theoretical and academically supportable financial analyses with demonstrable transactional experience to reach appropriate, supportable, and credible financial solutions to difficult business issues.