Atlantic Management Company, Inc. has a long history of providing credible and defensible opinions of value based on careful research and accepted valuation practices. Business valuations are performed for a variety of reasons, and the analysts in our Valuation Group have demonstrated their capabilities in assignments concerned with the valuation of:
We recognize that valuation is not an exact science. It is an art that blends quantitive analysis and qualitative input from our seasoned professional staff. We take the time to understand the dynamics of each entity and develop a multi-dimensional perspective of the business, the industry and the economic environment.
Our valuations are conducted in accordance with the stringent standards of the American Society of Appraisers, the Institute of Business Appraisers, the National Association of Certified Valuation Analysts, and the Uniform Standards of Professional Appraisal Practice.
Depending on the nature of the engagement and the needs of our clients, we communicate our findings in an appropriate format ranging from an informal opinion letter to a comprehensive written report. In each case, our analysis results in a thoroughly researched and carefully documented valuation that can withstand the closest scrutinity. Click here to see a list of issues to consider when hiring an appraiser.
Our integrated service offerings include:Valuation Premiums and Discounts
An integral part of the valuation process is quantifying the appropriate premiums or discounts which can have a significant impact on the final conclusion of value.
Using our in-house technical resources, we review market data, empirical studies, case law and tax rulings related to control, swing vote and other premiums, as well as discounts related to fractional and minority interests, marketability, lack of voting rights, built -in capital gains, key-person, and other special considerations that have a bearing on value. We also maintain an extensive database that tracks market activity across a broad spectrum of industries.
Goodwill Impairment - SFAS 142
SFAS 142 deals with newly acquired goodwill as well as goodwill and other intangible assets from prior acquisitions that are currently being carried on the balance sheet. This statement requires periodic testing (at least annually) to determine if goodwill has been impaired and uses two-step process:
Step 1 Test
Step 1 determines if goodwill has been impaired by comparing the fair value of the reporting unit to the carrying value of the unit, including goodwill.
Step 2 Test
Step 2 calculates the fair value of goodwill by allocating the fair value of the reporting unit to the unit's tangible assets, intangible assets, and liabilities.
Intellectual Property and Intangible Assets - SFAS 141
Intellectual property is an increasingly important commodity in today's knowledge-based economy. We value patents, copyrights, trademarks and other proprietary technology, and quantify economic damages in infringement litigation. We also determine royalty rates for licensing agreements or inter-company transfers. Our experience extends to determining the value of intangibles as stand alone assets or in the context of purchase price allocations.
Intangible assets specifically identified in SFAS 141 must be valued and recorded on the financial records. They can no longer be included as part of goodwill. Testing for impairment of all assets must be completed at least annually or whenever a defined triggering event occurs.
Under SFAS 141, all business combinations must be accounted for using the purchase method rather than the pooling method. This requires a comprehensive purchase price allocation to identify and value all of the acquired company's assets, including intangible assets and goodwill.
As in the past, in-process research and development assets will be valued and expensed at their acquisition date. A notable change to the purchase price allocation mandated under SFAS 141 is the requirement to recognize intangible assets apart from goodwill. Instead of grouping all intangibles under goodwill, individual intangibles must be recognized and valued separately if they:
Any acquired intangible asset that does not meet the new criteria for separate recognition is carried on the balance sheet as goodwill and becomes subject to impairment testing under SFAS 142.
Fairness Opinions
Our clients rely on our objective fairness opinions in a wide range of transactions. Our independent perspective provides the needed assurances to directors, stockholders, trustees and other fiduciaries that a transaction is fair from a financial point of view.
Solvency Opinions
When financing highly leveraged transactions, lenders rely on our solvency opinions as pre-transaction evidence that the debt is insufficient to render the company insolvent. The solvency opinion is a first line of defense against claims of fraudulent conveyance and is instrumental in securing senior creditor status in the event of a bankruptcy.
Litigation Support
Atlantic Management is often called upon to assist trial counsel in identifying key financial issues and assessing the magnitude of the financial aspects of a case. We have testified extensively as expert witnesses in federal and state courts and have also served as court appointed experts to resolve valuation disputes.