Transaction Opinions

We help boards of directors, special committees, companies, and business owners fulfill their fiduciary duties—by providing them with comprehensive analyses and unbiased opinions about the financial fairness of pending transactions. Our intellectual rigor and wide-ranging financial expertise position us as a trusted advisor for clients worldwide.

We’ve been valuing companies and their underlying securities for decades, in complex situations and in virtually every type of change-of-control transaction, including:

• Affiliate and insider transactions
• Related-party transactions
• Synergistic mergers
• Transactions involving competing offers
• Down-round financings

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We assist financial sponsors, including private equity funds, hedge funds, and credit funds, through a range of affiliate transactions. As regulators and investors increase scrutiny of private investment funds, sponsors must be aware of actual or perceived conflicts of interest in affiliate transactions. Transactions or trades conducted by a sponsor among its affiliates may lead to investor challenges and regulatory actions.

Fund affiliate transactions often address end-of-life fund issues or involve combinations of assets across funds. Affiliate transactions that may be actual, or may be perceived as, conflicts of interest include:

• Cross-Trades or Fund Transfers
• Fund Seeding
• Fund Recapitalization
• Principal Transactions
• Contractual Arrangements
• Season and Sell

We can assist sponsors in satisfying their legal, regulatory, and contractual duties in connection with an affiliate transaction. Fairness opinions or valuation opinions may serve to both protect the sponsor and facilitate discussions about the transaction with the LP Advisory Committee and other parties. The receipt of independent advice and a financial opinion by a sponsor in affiliate transactions has become a widely adopted practice.

Houlihan Lokey has been at the forefront of providing valuation and fairness opinions to sponsors across a wide range of affiliate transactions. We have provided these “fund opinions” to many leading sponsors in connection with fund transfers, fund recapitalizations, and other portfolio company transactions.

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We render hundreds of solvency and capital adequacy opinions on behalf of boards of directors, lenders, equity sponsors, and investment banks. Our expertise in the areas of valuation, restructuring, and mergers and acquisitions provides a strong foundation for issuing solvency and other capital adequacy opinions, including surplus opinions and insolvency opinions. Our opinions provide an additional level of protection, mitigating our clients’ risk of fraudulent conveyance, particularly in the cases of:

• Leveraged transactions
• Stock redemptions
• Dividend distributions

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Our valuation professionals combine analytical tools with real-world transaction experience to objectively determine corporate worth. We help our clients determine their enterprise value in a variety of situations, including:

• Mergers and acquisitions
• Initial public offerings
• Redemptions of shareholder interests
• Determinations of tax liabilities
• Assessments of collateral values
• Reorganizations of family-owned businesses

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We have been at the forefront of the ESOP (employee stock ownership plan) movement since Congress legislated ESOPs in 1974, and we also help advise our clients on ERISA valuation and transactional matters. We have advised numerous sponsor companies and ESOP/ERISA trustees, rendering opinions on fairness, adequate consideration, valuation, and solvency, as well as structuring and negotiating complex ESOP transactions. The firm brings current and directly applicable industry and transaction experience to bear in advising a client with respect to various aspects of a transaction.

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Houlihan Lokey has one of the largest and most established business and securities valuation practices of any firm worldwide. We have provided education, guidance, and valuation services to a deep roster of clients, including Forbes 400 families and top U.S. tax attorneys. Our estate and gift tax valuation team provides the following services:

• Valuations of interests in closely held businesses or other securities
• Discount studies for partnerships or other estate planning vehicles
• Consulting services to enhance the design of securities for gifting or estate planning
• Litigation support and expert witness testimony for IRS appeals or tax court matters

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Our suite of sustainability advisory services provides bespoke support and solutions to address our clients’ environmental, social, and governance (ESG) and sustainability objectives. Our approach is outcome-oriented, targeting several discrete areas in which our clients are looking to strengthen oversight, manage risk, and enhance credibility with stakeholders. These services include:

• Greenhouse Gas Emissions (GHG) Estimation
• Sustainability Financial Modeling and Value Impact
• ESG Due Diligence and Analytics
• ESG Board Advisory and Vulnerability Assessment

Our dedicated sustainability professionals assist investors, boards, and management teams around the world by providing a broad range of sustainability capabilities. These offerings include comprehensive support in various areas such as recurring reporting and disclosures, due diligence, valuation, data analytics, data privacy, modeling, and tailored vulnerability assessments, among other impactful initiatives. 

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