Frequently Asked Questions
Are your Valuations Defensible? - Virtually every valuation is potentially subject to challenge from one party or another – the IRS, one or more buying or selling parties, beneficiaries, a spouse in a divorce case, or any of a variety of other interested parties. Each valuation handled by CCA is unique, and the propensity for an outside challenge is usually directly related to the facts and circumstances of each case. You can be assured that the professionals at Convergent Capital Appraisers strive to determine the right value while keeping in mind that our latent responsibility is to always deliver an opinion of value that is appropriate and defensible.
What kind of businesses do you value? - We have performed valuations on thousands of businesses and investment entities in a variety of classifications and industries. This includes incorporations such as family limited partnerships, limited liability companies, S-corporations, and C-corporations. Our industry experience is not limited to, but includes: utilities, oil and gas, construction, manufacturing, restaurants and franchises, wholesaling, distribution, retailing, healthcare, waste remediation, and a wide variety of professional and technical service providers focused on manufacturing, the oil and gas industries, the food service industry, construction, healthcare, distribution, etc.
Why do I need a business valuation?
- Negotiating a merger, acquisition, or business sale often involves differences in opinion of value. An experienced valuation professional can assist you in explaining the valuation process and how it should be applied.
- Business owners should have their business valued by a qualified professional business appraiser at least once every five years, and when business circumstances change significantly. This practice will provide the business owner with a greater understanding of the company's value over time as well as considerably aid the company during critical times, such as the death of an owner, litigation, merger or acquisition, etc.
- Transactions among owners, employees, or employee benefit plans inevitably lead to questions regarding value. The employees, owners, directors, and regulatory authorities will want to know that business interests or options are valued correctly.
- Business interests must be valued when transferred as a gift or as part of an estate. A professional, well documented, and thorough valuation is necessary to minimize IRS challenges.
- The Securities & Exchange Commission and Financial Accounting Standards Board wish to ensure investors have meaningful and consistent financial data on which to make informed investment decisions. Thus, both have emphasized the importance of determining where a business' value is derived and reporting the Fair Values on its financial statements.
- When a business determines it has been damaged by an illegal action, the value of the damages must be quantified.
- When business disagreements or martial dissolutions reach litigation, overbearing complexities can arise. The complexity of the underlying issues in business disputes requires knowledgeable and experienced experts to analyze and simplify the issues.
How much experience do you have? - The team of professionals at CCA has over 50 years of combined professional business experience. In addition to over 30 cumulative years experience in the business valuation field, our professionals have successful career histories as business owners, customer service management, senior operations management with publicly-traded companies and handling all aspects of operations in smaller privately-held manufacturing and service businesses. We believe that this blend of real-world experience in combination with our knowledge of the theoretical tenets of the business valuation field provides us with a rare and unique capability to provide you with practical advice regarding your valuation requirements.
Is it possible to have different values for the same equity holding? - Many people hold the mistaken notion that there can be only one "value," or that a value derived for one purpose is suitable for all situations. In reality, the value conclusion can be quite different depending in part on the purpose of the appraisal and the standard of value applied (i.e., Fair Market Value, Fair Value, Market Value, Investment Value, Intrinsic Value, etc.). Therefore, at any point in time, the concept of value changes depending upon the context in which it is applied. As part of the engagement process, the professionals at Convergent Capital Appraisers will work with you, your attorney, CPA or other members of your advisory group to define the purpose and scope of your appraisal, and to identify the appropriate standard of value that will serve as guidance during the valuation process.
How much do your services cost? - Each appraisal engagement is unique, and the cost of valuation services can vary greatly based on what is being valued. Many additional factors can influence our fee estimate including: the purpose (or use) of the valuation, the level of detail required in the written report, the quality and availability of financial records, the complexity of a business entity's equity structure, and any differential in the rights, responsibilities and benefits among equity holders.
Through an introductory conversation, we can discuss your project, determine what it entails and identify any complexities that may exist. We welcome your call to talk about your particular situation, and to work with you and your advisory group to help you achieve your objectives.
"I wanted to take this opportunity to thank you and your team"
"I wanted to take this opportunity to thank you and your team for all your hard work on providing an opinion of fair market value regarding membership interests of my Company."- Principle of a privately-held investment management company