Services

Areas of Practice

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Mergers and Acquisitions -

When a company merges with another company, is acquired by another company, or sold a valuation is necessary.  In a merger situation, a professional may be asked to establish an “exchange value” of the companies involved.  A valuator may be engaged to establish the value for either or both companies when businesses are acquired, they are often acquired for a flat or lump-sum amount.  For accounting and tax reasons, the lump-sum purchase price must be allocated among the various classes for tangible and intangible assets of the business. As certified valuation analysts, our firm can assist you in valuing your company and determining the value of your intangible assets.


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Employee Stock Ownership Plans (ESOPs) -

An ESOP is a type of employee benefit plan.  It is considered a defined contribution plan and is intended to invest primarily in the employer’s stock.  The ESOP is a mechanism by which employees become beneficial owners of stock in their company.   To establish an ESOP, a firm creates a trust that the employer funds by either contributing shares of the company and/or contributing cash to buy company shares.  The company can also have the ESOP borrow funds to buy new or existing shares of company stock.  The trustee responsible for managing the ESOP trust may be a bank, trust company, disinterested individual, company officer or employee.  Employee Benefit Plans.  Many small-to-mid sized employers have instituted ESOPs.  Generally, a non-publicly traded company with an ESOP must obtain a valuation of its stock on an annual basis.


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Solvency and Insolvency Opinions -

If a loan is in default or could be downgraded a business valuation can help determine the level of risk related to the current financial condition of your client.


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Sales and Divestitures

In a sale or divestiture of a company, or of an interest in a company, the seller may engage a professional’s services to establish a range of values of the business that will assist the seller in negotiating a sales price.  Conversely, a person or company may want to perform a valuation of a company they may want to acquire.  When businesses are acquired, they are often acquired for a flat or lump-sum amount.  For accounting and tax reasons, the lump-sum purchase price must be allocated among the various classes for tangible and intangible assets of the business. As certified valuation analysts, our firm can assist you in valuing your company and determining the value of your intangible assets.


Expert Testimony/Litigation Support - 

For a variety of reasons, an attorney involved in a pending lawsuit might need to determine the value of a closely held business.  The valuation professional, as the expert, will be asked to give expert testimony regarding the conclusions.  The need for litigation support relative to business valuations can arise in divorces, partner disputes, dissenting shareholder actions, insurance claims or wrongful death and injury cases.


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Banks ~ Loan Application - 

If you are working with a client purchasing or selling an existing business, considering going public, or considering bringing on a new investor, one of the first things you'll need to determine is how much the business is worth. Valuing a business is a complicated process and achieving fair market value should be a top priority. Fair market value as defined through the National Association of Certified Valuators and Analysts (NACVA) is “the price, expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arm’s length in an open and unrestricted market, when neither is under the compulsion to buy or sell and when both have reasonable knowledge of the relevant facts:”

If you are considering an SBA loan to finance a project, our company is up-to-date on the latest regulations you need to know in order to fulfill the underwriting requirements for your loan application.  A business valuation is required in some instances by a certified professional and considered by SBA to be a “qualified source.”  The partners of Kelly-Schulte Business Valuations, LLC have been certified through NACVA, an SBA qualified source.


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Buy-sell Agreements -

Also, known as a “corporate pre-nuptial”, all closely held business should adopt a buy-sell agreement among the partners or shareholders.  Much protracted litigation could be avoided if, in the beginning, the business owners would address the issue of a buy-sell agreement in their partnership or shareholders agreements.  A buy-sell agreement is an agreement that establishes the methodology to be followed by the parties regarding the ultimate disposition of a departing or a deceased owner’s interest in a closely held business.  The process of determining the value of the business is directed by the buy-sell agreements and there are many alternative procedures for doing so.  Some businesses may be based on a predetermined or prescribed formula, or other agreements may require that an independent valuation be performed periodically.  Regardless of the alternative selected by the owners, a professional may be needed to assist in the valuation process.


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Estate Planning, Gift Taxes and Charitable Contributions -

The value of the closely held business must be ascertained to adequately perform a thorough and comprehensive estate or financial plan.  It may be also necessary to establish the value of an interest in a closely held business to properly prepare estate or gift tax returns and to establish the basis of inherited stock in the hands of an heir to an estate. 

There are various ways a business owner can transfer the value that has accumulated in a closely held business. If a charitable gift is made of property valued at more than $5,000, a qualified appraisal” must be attached to IRS Form 8283; the charity, in turn must provide contemporaneous written acknowledgement (the substantiation requirement).


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Damage or Economic loss cases

A valuation assignment can quantify the loss of value to your business based on reduced cash flow resulting from a breach of contract, the loss to a business because of an action by another, or the loss of business opportunity from a fire or other catastrophic event.


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