2021 Johnson/Park DLOM study is now available
The Johnson/Park empirical method to estimate a discount for lack of marketability (DLOM) is one of the most popular methods business appraisers use for this purpose, according to a recent BVR survey.
BVR Briefing - Control Premiums: A Deep Dive into the New Data on Invested Capital Premiums
June 2021 PDF
BVR (editor)
Business Valuation Resources, LLC
The Strategic Premium: An Inside Look at M&A Prices
Synergistic/strategic value should not be combined into one level in the typical chart that shows levels of value. Some buyers pay a “strategic premium” that propels strategic value to the top of the value chart and well in excess of the expected synergistic value. The author uses real-world examples to illustrate this concept.
Valuing Shareholder Cash Flows
The integrated theory of business valuation provides a conceptual framework for disciplined analysis of valuation questions. Too often, valuation analysts are tempted to view individual components of a valuation assignment on a piecemeal basis. Adhering to the integrated theory helps valuation analysts develop base valuation conclusions, discounts, and premiums that are rooted in a shared perspective of the subject company and the subject ownership interest. In the first webinar of the three-part series, Chris Mercer ...
Evaluating and Applying Control Premiums
In recent years, a greater amount of scrutiny has been placed on valuation analysts’ selection and use of control premiums. As a result, there has been a renewed interest in distinguishing acquisition premiums from control premiums and equity premiums from invested capital premiums. Join Timothy Meinhart for a comprehensive discussion of the proper quantification and application of acquisition premiums and control premiums and also learn about the benefits of using market-based invested capital premiums rather ...
LLC buyout at fair value poses ‘conundrum’ for the court
In allowing LLC members to buy out a departing member to avoid the dissolution of the company, a court had to determine the fair value of the departing member’s interest in a holding company.
Conceptual Overview of the Integrated Theory
The integrated theory of business valuation provides a conceptual framework for disciplined analysis of valuation questions. Too often, valuation analysts are tempted to view individual components of a valuation assignment on a piecemeal basis. Adhering to the integrated theory helps valuation analysts develop base valuation conclusions, discounts, and premiums that are rooted in a shared perspective of the subject company and the subject ownership interest. This first webinar in the three-part series sets the stage ...
Finkel v. Palm Park, Inc.
In LLC member dispute, court faces “conundrum” where fair value buyout seeks to avoid LLC’s dissolution and court leans on expert’s FMV valuation using net asset value approach premised on “orderly liquidation”; court notes FMV is based on hypothetical actors and transaction, not specific parties.
Court’s Fair Value Determination Leans Heavily on Expert’s Fair Market Valuation Premised on Liquidation
In LLC member dispute, court faces “conundrum” where fair value buyout seeks to avoid LLC’s dissolution and court leans on expert’s FMV valuation using net asset value approach premised on “orderly liquidation”; court notes FMV is based on hypothetical actors and transaction, not specific parties.
Take Control of Your Premiums
Join BVR for a first look at the new Control Premium Study platform. In the session we will cover the basics of the control premium study, discuss the enhancements to the platform, and provide a walkthrough of how to best utilize the new platform to retrieve control premiums, minority discounts, and multiples.
Family Matters: Standard of Value, DLOM/DLOC Discounts and Drama in BV
A buried body, sex surrogates, and family-owned business create a dramatic background for a recent court case impacting valuation. With complex minority discounts, this case kicks off a compelling discussion of key issues in family law. Experts Stacey Udell, Neil Beaton, and Ron Seigneur tackle these thorny issues with clarity and comedy. Get treated to the tricks and tips you’ll want when your next family-owned business engagement rings your doorbell.
Control Discounts and Premiums - What is Old and What is New
Where do they come from? Do they even exist? Should I fear using them? No, this October event doesn’t delve into the supernatural but rather attempts to demystify the methods and resources available to quantify control discounts and/or premiums. Join Jim Ewart and Jim Alerding to learn what is new, what is old, and what matters. Learn the sources, context, and usefulness of control premiums and discounts, and the best practices for determining what they ...
Pre-IPO Revival: Up your DLOM Game in 2020
Pre-IPO data are very useful for valuators. Join Brian Pearson, creator of the Valuation Advisors Lack of Marketability Discount Study, to learn how to calculate discounts using different types of data (stock, options, and convertible preferred stock) and learn why the abundance of pre-IPO data is useful versus smaller samples of discount data. Brian will lead a discussion of prior criticisms of some sources of data and address those criticisms as they pertain to Valuation ...
BV and litigation seminar in New Haven, Conn., September 26
There’s a unique opportunity to hear from a veteran valuation expert with many years of experience in court, and BVWire will be there! Appraiser Jim Alerding (Alerding Consulting LLC), who has testified in over 400 cases, will present a full-day seminar, Business Valuation and Litigation.
ICAEW Practical Business Valuation programme begins again this week
ICAEW offers its two-day valuation basics course again beginning 9 May in London (the second day is 24 May).
How much is business control worth?
A new control premium study published in M&A Review examines 589 takeover premiums of closed European transactions that occurred between 2005 and 2016.
Court Says ‘Fair Value’ Under State Shareholder Oppression Law Precludes Discounts
In shareholder oppression suit, court clarifies meaning of “fair value” under applicable statutory framework; court cautions not to conflate “fair value” with “fair market value”; in drafting statute, state legislature explicitly and implicitly conveys its rejection of discounting, court says.
Kolwe v. Civil and Structural Engineers, Inc.
In shareholder oppression suit, court clarifies meaning of “fair value” under applicable statutory framework; court cautions not to conflate “fair value” with “fair market value”; in drafting statute, state legislature explicitly and implicitly conveys its rejection of discounting, court says.
Statutory Fair Value in Dissenting Shareholder Cases: Part II
This article continues the discussion of statutory appraisal that was presented in Part I in the prior issue of Business Valuation Review. Fair value, the predominant standard of value employed by state courts to value dissenters' shares in appraisal cases is, is determined by state law. In most states, fair value is the shareholder's pro rata portion of the value of a company's equity. This article discusses the approaches used by the Delaware courts' views ...
What DLOM methods are now used the most?
Is there a consensus yet on the method to use for estimating a discount for lack of marketability (DLOM)? Find out by taking a short survey.
Proposed method to deal with confusion over discounts
A number of leading valuation experts have called for the profession to speak with one voice and eliminate the confusion over the use of discounts. One valuation expert offers up some nomenclature and—more importantly—a framework that he hopes will help with this thorny issue.