Transaction Advisory Services
The business world moves quickly, and business owners must act swiftly and confidently to capitalize on new opportunities. However, most business owners don’t have the valuation background to assess or negotiate a fair price for the deal. As a result, they may unwittingly lose substantial money, stock, or value in the negotiation process. Abrams’ Valuation Group, Inc. offers expert transaction advisory services to give business owners like you the knowledge and confidence to buy or sell for the right price.
What is transaction advisory?
Transaction advisory refers to professionals who advise and support business owners on either side of a potential business deal. These deal advisory services can include market and company research, valuation analysis, company projections, and fair negotiation assistance. At AVGI, our transaction advisory services assist business owners in making smart business decisions that add value to their companies at the right price.
Benefits of Transaction Advisory
A little-known, harsh reality is that every transaction is a conscious or unconscious valuation. In most cases, it is unconscious, accidental, and adverse to at least one party.
Unless the buyer and seller get it just right, every transaction results in a transfer of wealth
between the parties. The losers may never know; if they do, it will be too late. It may save you millions of dollars to base your negotiations on a sound valuation model that protects you from:
- Paying too much
- Receiving too little
- Giving away too much stock for the investment
- Receiving too little stock for the investment
A professional valuation also facilitates the transaction. Unless buyers and sellers have a thorough knowledge of value, they can argue about price without understanding what creates value or how to measure it. This wastes much time and resources and increases stress.
A valuation model provides a common language for buyers and sellers. It reduces or eliminates arguments about price and instead elevates the dialog to discuss assumptions of the model. This changes the win-lose dynamic to a win-win, saving time and stress for both buyers and sellers.
Financial Due Diligence Services
AVGI helps investors and companies on both sides of the transaction identify factors driving and diluting value so they can complete the financial due diligence process at every stage of the deal.
AVGI can provide crucial insights and assistance in:
- The pre-LOI stages of a deal
- Full-scope buy-side due diligence
- End-to-end sell-side due diligence
- M&A tax planning, due diligence, and financial reporting
- Cybersecurity and technology due diligence in M&A transactions
Entering negotiations with AVGI’s expert financial due diligence backing gives companies the peace of mind and confidence they need to strike a great deal, knowing they have fulfilled their financial due diligence obligations.
ESOP Advisory Services
Companies that want to offer ESOP (Employee Stock Ownership Plans) need reliable ESOP consultants to help them maximize ESOP benefits to the employees and minimize ESOP liabilities for the company.
AVGI has extensive experience in ESOP valuation and consulting, which companies can rely upon definitively for guidance in creating the most advantageous ESOP program for all parties involved.
AVGI’s president and founder, Jay Abrams, has invented dozens of valuation formulas relating to leveraged ESOPs. His articles were the first to explain how selling stock to a leveraged ESOP causes dilution in value by creating a post-transaction, off-balance sheet liability that did not exist before the transaction. He developed the mathematical formulas and pioneered the financial engineering to:
- Calculate the post-transaction dilution in value to the Company and the ESOP
- Facilitate level comparison of company performance pre- and post-ESOP
His research can prevent lawsuits from disgruntled employees who do not understand how leveraged ESOPs cause dilution in value. Joe Busch, Esq. of Gibson, Dunn & Crutcher observed that if Jay Abrams’ articles and formulas had been in existence, it is likely that the Parsons Engineering case never would have gone to trial.
AVGI provides solvency and capital adequacy opinions on behalf of Boards of Directors, lenders, equity sponsors, and investment banks.
Our expertise in valuation, restructuring, and mergers and acquisitions creates a strong foundation for rendering solvency and other capital adequacy opinions.
Our opinions supply the assurance and security our clients need to protect themselves from the risk of fraudulent conveyance in:
- Leveraged transactions
- Stock redemptions
- Dividend distributions
AVGI provides solvency and capital adequacy opinions on behalf of Boards of Directors, lenders, equity sponsors, and investment banks.
Our expertise in valuation, restructuring, and mergers and acquisitions creates a strong foundation for rendering solvency and other capital adequacy opinions.
Our opinions supply the assurance and security our clients need to protect themselves from the risk of fraudulent conveyance in:
- Leveraged transactions
- Stock redemptions
- Dividend distributions
The AVGI team brings a wealth of valuation knowledge and expertise to each advisory engagement. This is critical in transactions, as it allows the buyers and sellers to strike a fair deal that is beneficial to all parties. AVGI’s deep experience in indentifying what drives value allows us to offer greater value to our clients in supporting them to make wise transactions.
Investing in a top-notch valuation is a wise use of your money and protects your wealth and time. If you want to buy a new business or sell your company and engage a professional, please contact us so we can assist you through the buying or selling process and help you receive the best possible price.
FAQs About Transaction Advisory Services
How do you choose the right transaction advisory services provider for your business?
Choosing the right TAS provider for your business can be a daunting task, but there are a few key considerations that can help guide the decision-making process. AVGI’s 30+ years of experience have shown that a deep understanding of value drivers is far more important in transaction advisory than industry expertise. Although it is a nice plus to find a provider with experience in your industry and transaction type, time and again, valuation know-how has proven far more crucial in closing transactions successfully. By taking the time to evaluate potential TAS providers, you can increase your chances of achieving a successful outcome in your transaction.
What is the difference between buy-side and sell-side transaction advisory services?
Buy-side transaction advisory services focus on supporting businesses that are looking to acquire or invest in other high growth companies. These services typically involve due diligence, valuation, and transaction structuring support to help a potential buyer make informed decisions. Sell-side transaction advisory services, on the other hand, focus on businesses that are looking to sell or divest assets. These services typically involve preparing a business for sale, identifying potential buyers, and negotiating the sale process.
How can transaction advisory services help businesses with financial reporting?
Transaction advisory services can provide valuable support to businesses in financial reporting by helping them prepare accurate and reliable financial statements and disclosures. TAS providers can assist in identifying and addressing accounting and financial reporting issues, ensuring compliance with applicable accounting standards, and providing insights into potential financial risks and opportunities.
How can transaction advisory services help businesses in the due diligence process?
Due diligence is a critical component of any transaction, as it helps businesses identify and assess potential risks and opportunities. Transaction advisory services can provide valuable support in the due diligence process by helping clients identify areas of concern, assess the quality of financial and operational data, and provide insights into potential deal-breakers. Additionally, TAS providers can help businesses develop a comprehensive due diligence team to organize and manage each due diligence phase.
What are some of the key challenges facing private equity firms in the transaction process, and how can TAS providers assist in addressing these challenges?
Key challenges facing private equity firms in the transaction process include increased competition, rising valuation multiples, and the need to identify and seize opportunities for value creation. TAS providers can assist in addressing these challenges by providing specialized expertise and insights into market trends and best practices. They can also assist in post-merger integration and value creation, by identifying areas for operational improvements and cost savings. Additionally, TAS providers can assist in developing and executing exit strategies, including through sale or IPO.