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Financial Opinion Services

Willamette Management Associates analysts routinely serve as independent financial advisers to assist clients in the following transactions:

  • Mergers and acquisitions (of private companies)
  • Going private transactions (of public companies)
  • Demutualization transaction of mutually owned companies
  • Employee stock ownership plan (ESOP) employer stock purchase transactions

We provide the following financial opinions to provide comfort to the transaction participants:

  • Fairness opinions
  • Solvency opinions
  • Adequate consideration opinions
  • Fair market value (private inurement) opinions

Mergers and Acquisitions
We provide independent financial advice to clients involved in the pricing and structuring of a merger or organization transaction. This advice includes the calculation of a reasonable share exchange ratio. This advice includes the design of transaction- specific debt and equity instruments. And, this advice includes the design and valuation of contingent compensation earnout provisions.

Sample Engagements +

We provided financial advisory services for the acquisition of a privately held, upscale, mid-priced restaurant company with over 400 locations across the United States. We prepared a transaction valuation analysis that was used by a corporate acquirer to negotiate and finalize the acquisition. Following the acquisition, we estimated the fair market value of a noncontrolling equity ownership interest for purposes of a related-party sale transaction. Our financial advice involved an analysis of (1) the company's multiple restaurant concepts, (2) the expected lifecycle of each restaurant concept, and (3) the company's competitive position in each market.


Going Private Transactions
We are routinely called on to opine on the fairness (from a financial perspective) of a public corporation that has made a stock tender offer in order to go private. These analyses often include consideration of the appropriate control price premium to be paid for the public shares.

Sample Engagements +

We provided financial advisory services related to the going private transaction for a mid-size public communications company. Our transaction opinion was used to set the offer price to acquire the stock owned by the public shareholders. Our transaction analysis included the valuation of the company's (1) incumbent local exchange carrier (ILEC) wire line company, (2) emerging wireless company (including a cellular division and a PSC division), and (3) broadcasting company. Our transaction analysis also involved the valuation of specific intangible assets held by the wireless company, including its FCC licenses.


Demutualization Transaction Opinions
Demutualizations of mutual insurance companies, savings banks, and other financial institutions usually involve two important questions. The first question is: What is the value of the overall mutual entity (for either IPO or acquisition purposes). The second question is: How should the overall sale price be allocated to the various classes of the mutual entity owners-that is, the depositors, insureds, and so on.

Sample Engagements +

We provided a valuation analysis and transaction opinion for the demutualization of a major life insurance company. The principal issue in the demutualization related to the allocation of the subject IPO proceeds among the various classes of member policyholders. We also provided expert testimony with regard to the demutualization transaction.


ESOP Employer Stock Purchase Transactions
We are particularly well known for our work with respect to ESOP formations and ESOP employer stock acquisitions. The independent financial adviser should opine to the ESOP trustee as to whether the purchase or sale of sponsor company securities is fair to the ESOP participants (from a financial perspective). Such an analysis should consider both the absolute fairness and the relative fairness of the proposed stock purchase or sale transaction.

Sample Engagements +

A successful ESOP sponsor company received an unsolicited offer from a public corporation to acquire the employer company. The ESOP trustee retained us to prepare an independent fairness opinion related to the transaction. Our independent financial adviser's fairness opinion concluded that the proposed acquisition transaction was fair to the ESOP from a financial point of view.


Fairness Opinions
We provide fairness opinions with respect to merger, acquisition, restructuring, recapitalization, dividend distribution, going public, and going private transactions. In these financial adviser analyses, we analyze both the price and the terms of the pending transaction. We opine as to whether the transaction is fair to our client from a financial point of view.

Sample Engagements +

We were retained by a large medical malpractice insurance company to render a fairness opinion regarding the sale of substantially all of the company assets to a competing malpractice insurer. The selling company operated as a mutual insurance company-that is, it was owned by the insured physicians. The terms of the transaction called for an acquisition price payout over time. The payout formula was based on a mutually agreed upon surplus value at the closing date. This asset acquisition transaction required the approval of the state department of insurance.


Solvency Opinions
When a debtor company approaches the zone of insolvency, the duty of the directors shifts from the shareholders to the creditors. The debtor company should not enter into transactions (e.g., financing, dividend, etc.) that will cause the company to become insolvent. In our solvency analysis, we consider all three generally accepted solvency tests: the balance sheet test, the cash flow test, and the capital adequacy test.

Sample Engagements +

We performed a solvency opinion related to a publicly traded technology company that received a friendly takeover offer from another public corporation. Our solvency analysis provided assurance to the client company board of directors that the target corporation was still solvent after consideration of the effects of the proposed acquisition debt.

We performed various solvency analyses for a super-luxury resort development company. These solvency opinions were relied on by the corporation board of directors in (1) dividend policy decisions, (2) new financing decisions, (3) new business formations, and (4) subsidiary divestitures.


Adequate Consideration Opinions
ESOPs cannot pay more than adequate consideration to buy employer corporation securities. And, ESOPs cannot accept less than adequate consideration to sell employer corporation securities. Our adequate consideration opinions analyze both the price and terms of a proposed employer stock purchase or sale. Our adequate consideration opinions provide assurance to the ESOP trustee that the proposed transaction complies with both ERISA and IRS requirements.

Sample Engagements +

A hotel industry employer corporation formed an ESOP. The founding family members sold 100 percent of the corporation common stock to the ESOP trust. We analyzed the price and the deal terms, and we issued a fairness opinion to the ESOP trustee. The opinion provided comfort to the trustee that the ESOP did not pay more than fair market value for the employer corporation stock.


Fair Market Value (Private Inurement) Opinions
Not-for-profit entities (in health care, education, and other professions) have a responsibility to maintain the assets they manage for the public benefit. Therefore, not- for-profit entities cannot enter into transactions to sell assets for less than fair market value, to buy assets for more than fair market value, or to pay more than fair market value for contractual services. Should the not-for-profit entity enter into such a transaction that provides a private inurement to a for-profit entity, the not-for-profit entity may be subject to intermediate sanctions. Our private inurement opinions provide assurance regarding the transaction fairness to the not-for-profit entity board.

Sample Engagements +

A not-for-profit professional association entered into a series of agreements to outbound license its trademark and trade name. We performed a fair market valuation related to the series of trademark license royalty rates. We concluded that the not-for- profit entity was receiving fair royalty rates with respect to the trademark license agreements. This opinion provided comfort to the client board of directors that the license agreements did not result in private inurement or excess benefits.