The Appraisal Foundation’s forthcoming VFR Valuation Advisory #3, The Measurement and Application of Market Participant Acquisition Premiums (Advisory #3) sets forth best practices for measuring and evaluating the reasonableness of valuation premiums applied in (or implied by) fair value measurements of controlling interests in business enterprises. Travis Harms, Mercer Capital’s Financial Reporting Valuation Group lead, explains this topic. To read the full article in Mercer Capital’s Financial Reporting Blog, click: New Market Evidence Confirms Control Premium Best Practices. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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The first three quarters of 2017 were active for U.S. markets. Major indices were characterized by low volatility and upward momentum against a backdrop of tightening monetary policy and strong economic indicators. Private equity saw steady deal flow despite challenging market conditions, and record levels of venture capital deployment were seen amidst declining deal volume as capital continued to gravitate to the unicorns. With one quarter left, we take a look at market activity during the first three quarters of 2017. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Market Trends: 3Q17 Update. This article is…
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The rise in firm discontinuances and sales brings with it a host of practitioner concerns regarding independence, confidentiality, and the transfer of client files. To address these concerns and provide specific guidance, the Professional Ethics Executive Committee issued two new interpretations of the AICPA Code of Professional Conduct (the Code) and revised an existing interpretation. April Sherman, manager at AICPA Professional Ethics Division, explains. To read the full article in the Journal of Accountancy, click: How to Comply with the New AICPA Ethics Standards for M&A.
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The stock market rallied in the first five months of the year, with the Dow Jones and S&P 500 reaching record highs and continuing to climb. Megan Richards, financial analyst with Mercer Capital, explains though, that IPOs remain scarce compared to prior years. To read the full article in Mercer Capital’s Financial Reporting Blog, click: IPO Supply and Demand. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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How do you get buyers and sellers to execute an M&A transaction when the prospects of an industry are extremely uncertain? Part of the answer may be to structure the deal in a way that defers payment of a (significant) portion of the purchase price in the form of contingent consideration. In this blog post, Sujan Rajbhandary, vice president, interviews Travis Harms, who leads Mercer’s valuation for financial reporting practice, to get his thoughts on the new valuation guidance. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Q&A: New Guidance on Valuation of Contingent Consideration (Earnouts).…
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What is driving the global surge in M&A deals? In many cases, companies are looking for revenue growth. But how is the pursuit of revenue synergies working out? With less than a quarter of acquirers reporting that they are achieving more than 80% of their target, there is clearly room for improvement. This may not come as a surprise—it is widely understood that revenue synergies are more difficult to achieve when compared to cost synergies. At the same time, some companies are meeting their revenue targets. What are they doing that others are not? In this survey report, we find…
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The number of deals involving firms with over $100 million dropped 25% last year to 104 deals, from 130 in 2015, according to Fidelity’s 2016 Wealth Management M&A Transaction Report. Charles Paikert, senior editor for Financial Planning, looks at why the big RIA buyers are becoming more discerning. To read the full article in FinancialPlanning, click: How the Big Time M&A Game is Changing.
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Federal Class-Action Litigation in Securities Disputes Rises Class-action securities lawsuits filed in federal court last year numbered 270, the most in 20 years, according to a report from the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research. The 80 filings related to mergers and acquisitions were the biggest factor in the increase. Meaghan Kilroy explains. To read the full article in Pensions&Investments, click: Federal Securities Class-Action Suits Jump to 20-Year High in 2016.
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Many advisers have plans for growth, but does anyone really know what causes above average sustained progress? After years of experience and study, Glenn Kautt, CFP, EA, AIFA, concluded that leading a firm requires you to have a detailed plan. To read the full article in Financial Planning, click: The Growth Plan: Keeping your Practice on Course.
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Transaction Structure Considerations on Target Company Value Valuation analysts do not have to be investment bankers to value an M&A candidate, but they do need to understand taxable and non-taxable stock acquisitions. This discussion summarizes some of the tax benefits—and some of the tax complexities—associated with a taxable stock purchase deal structure. Although the analyst is not expected to be the transaction income tax advisor, the analyst opining on the deal price fairness to any of the deal participants should be generally aware of these transaction structure considerations.
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Mergers and acquisition activity relays much information to the general public. Following an M&A transaction, acquirer companies conduct purchase price allocations (PPAs) to measure the fair value of various tangible and intangible assets of the acquired business. Karolina Calhoun, senior financial analyst with Mercer Capital, discusses that the Mercer Capital Lab Services Newsletter observes and analyzes M&A transactions in order to gain insight into the drivers and financial metrics behind the deal. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Purchase Price Allocations in the Lab Services Industry. This article is republished from Mercer Capital’s Financial…
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A merger or acquisition is a critical move, and many don’t work out. Are you ready to make the jump? John J. Bowden Jr. explores some topics you should consider first. To read the full article in Financial Planning, click: How to Play the M&A Game.
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Mergers and acquisitions (M&A) have continued growing since 2008’s financial crisis. Through the first three months of 2016, the value of worldwide M&A totaled nearly $750 billion. Cross-border M&A activity totaled $308 billion—accounting for a quarterly record-high 41% share of global M&A value. As in previous years, M&A in industries with hefty intangible assets—such as pharmaceuticals and technology, media and telecom—dominated deal making.[1]
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2015 was a strong year for FinTech. But, there are complexities in valuing venture-backed technology companies and the ability for market/investor sentiment to shift quickly. So, as Jay D. Wilson, Jr., vice president and senior member of Mercer Capital’s Depository Institutions practice, explains, it is important to have a valuation professional that can assess the value of the company as well as the market trends prevalent in the industry. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Preferences and FinTech Valuations. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. …
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With the New Year just around the corner, Mercer Capital is beginning their countdown a little early. Here are this year’s 10 most popular posts from The Financial Reporting Blog. Happy New Year 2016! To read the full article in Mercer Capital’s Financial Reporting Blog, click: Financial Reporting Blog: Best of 2015. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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Being on the rise, dissenting actions are catching the eye of investors, attorneys, and other deal makers. Jay D. Wilson, Jr., senior member of Mercer Capital’s Depository Institutions practice, takes a look at why it is important an appraiser preparing a valuation of a bank in an appraisal action understand both valuation techniques and the banking industry. To read more about the results of this report in the Mercer Capital’s Financial Reporting Blog, click: Dissenting Shareholders and Bank Appraisals: Speak Now or Forever Hold Your Peace This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with…
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Meet Your Advisory Team Selling a business is a one-time process for most owners. It is also a harrowing process involving professionals in many disciplines. Here is a description of the primary people assisting in the process.
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What Financial Advisors and Quantum Experts Should Consider in this Growing Market Neither the seller nor the buyer intends a dispute to arise as a result of a successful or failed M&A transaction. However, due to the economic importance of M&A decisions and the high purchase prices paid, contentious situations can be observed in around ten percent of all M&A transactions as studies have shown. In this article, leading M&A advisors and attorneys, from Munich, Germany, share their views on the drivers that may explain the source of contention and specifics which need to be addressed by the financial advisors…
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Does anyone know what the future holds for markets? Perhaps fairness options can help financial advisors seek the answers they are looking for. Jeff K. Davis, Managing Director of Mercer Capital’s Financial Institutions Group, explores this option and some issues to consider when deciding if it should be used in a falling market. To read more about the results of this report in the Mercer Capital’s Financial Reporting Blog, click: Fairness Opinions and Down Markets. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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Is Zero-Base Budgeting (ZBB) making a comeback and will it stick around this time? Matt Fitzpatrick and Kyle Hawke for McKinsey, examine five key elements of success and share their tips for a new beginning. To find out more on the McKinsey and Company’s article, click: The return of zero-base budgeting.