Formal valuations and fairness opinions are normally required to honor the fiduciary obligations of boards when considering a strategy that could significantly change the ownership of a business. Examples of valuations that we have performed include:
We have served as financial advisors to a health plan that was acquired by a publicly traded company. Publicly traded companies' responsibilities to shareholders include careful consideration of the effect of acquisition transactions on the ownership interests of shareholders. Normally, this entails the retention of an outside advisor with expertise in valuation of the industry of the company. In connection with this assignment, we rendered an opinion that the transaction was fair to the selling shareholders from a financial perspective. This form of formal valuation is called a Fairness Opinion.
Annual valuations are typically necessary to determine the value of shares of companies owned in part by Employee Stock Ownership Plans. Valuations help the trustee to determine the value of shares in connection with their issuance or liquidation. Sherlock Company has provided valuations for the Employee Stock Ownership Plan for the benefit of employees of a health plan.