Fairness, Solvency Analysis and Due Diligence

Fairness opinions are usually required in merger and acquisition transactions where one or both parties may have a potential conflict of interest. An example of this is when a majority or control shareholder seeks to acquire the remainder of the outstanding shares of a company, often involving borrowing large sums of money secured by the assets of the company. A qualified firm experienced in transaction analysis can assist in guiding the fiduciary through an acquisition process.

Another important application of valuation analysis is in the area of solvency (non-bankruptcy) or capital adequacy analysis. Often this involves analysis and assessment of the company's post transaction financial viability in a leveraged buyout transaction (LBO). The due diligence required in a solvency analysis often focuses on three major components: an analysis and/or valuation of the balance sheet; an analysis of the cash flow with an eye towards the repayment of debt in a LBO; an analysis of the capital base or equity cushion pre and post transaction. Our firm's financial, accounting and valuation expertise enable us to be valuable members of the team in due diligence and solvency analysis.

Overview of HSSK Group valuation services.