First—our sincere apologies to Josh Angell, who’s not an intern (as last week’s issue incorrectly stated), but who has worked in the BV department of Moore, Ellrich, & Neal for the past three years. Angell is also the author of the recent article on the FMV Restricted Stock Study that fed the flames of another ongoing controversy within the BV profession on deriving the discount for lack of marketability. (For various views on Angell’s article, see the item below.)
Showing that he’s not afraid to take on tough topics, Angell has just posted a new article, “Empirical Research Generally Does Not Support S Corp Premium in Control Transactions.” Starting with the 18,000-plus private market transactions in the Pratt’s Stats database and then filtering the data for nine different variables—including buyer-type, industry affiliation, and year of sale—Angell ultimately concludes that there is “no empirical evidence to support the existence of an S corp premium in stock transactions in the market for control. Other valuators may find this information useful,” he adds.
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