Please see the complete descriptions of our Corporate Transactions services below:
Corporate Transactions
Fairness Opinions
A fairness opinion is a professional opinion stating whether the consideration offered in a transaction is fair to the owners of the company from a financial point of view.
ComStock Advisors assists boards of directors, trustees, buyers, and other parties who request fairness opinions for mergers, buybacks, divestitures, acquisitions, reorganizations, and large stock purchase transactions. Our experience in valuing companies and their underlying securities provides us with the expertise required to advise our clients with these complex transactions.
Fairness opinions not only include a valuation of the company, but also look at the financial structure of the transaction, including the form of the consideration received. Possible forms of consideration include cash, notes, warrants, and equity securities.
Other issues of relative fairness may be addressed, such as whether the pricing of the debt and the terms of any employment and non-compete agreements are market-related. We can also review the relative fairness among investors with the same or different classes of stock.
Mergers and Acquisitions
ComStock Advisors’ experience in assisting boards of directors and management teams with investment decisions has been critical to our clients’ success. As independent advisors, we can evaluate transactions from a strategic and a financial buyer’s point of view. We strive to understand our client’s objectives and the specific circumstances surrounding the transaction. Our team of seasoned valuation analysts prepares an independent valuation of the subject company. We then work with our clients through all stages of the negotiation process to ensure a timely closing of their transaction.
Going Private Transactions
Many times the cost of remaining a publicly traded company is so excessive that becoming a private company may be the best alternative for shareholders. When a company has fewer than a certain number of shareholders, it may no longer be required to report with the Securities and Exchange Commission (SEC).
Common transactions that give rise to “going private” transactions include:
- A tender offer to purchase all or most of a company
- A sale or merger of assets to another company
- Reverse stock splits
ComStock Advisors works with boards of directors and management to determine the appropriate price to utilize in consummating these transactions.
Divestitures
Divestitures involve the disposal of investments or assets through sale, exchange, closure, or bankruptcy. ComStock Advisors is often retained to render opinions to boards of directors to ensure that the consideration received is adequate and fair to the client’s shareholders.
Raising Capital
- Debt – Our dependable team works diligently with clients to prepare Confidential Information Memorandums (CIMs) for distribution to a broad network of senior and subordinated referral sources and former clients. A CIM prepared by ComStock Advisors provides essential information for these lenders as they undertake due diligence to make their investment decision. Our CIMs contain:
- A comprehensive executive summary
- An industry overview
- Detailed financial information
- A discussion on management and future strategy
- A description of organization and growth opportunities
- Equity – We work with strategic partners to execute capital raises.
Bankruptcy
ComStock Advisors’ professionals have provided financial advisory services to banks and other major secured and unsecured creditors and equity holders. We perform financial reviews of Plans of Reorganization and the valuation of underlying tangible and intangible assets and liabilities of the company.
Recapitalizations
- Reverse Stock Splits — ComStock Advisors has been called upon both by controlling interest shareholders and minority interest shareholders in these situations. When representing the company, we determine whether the price and terms of the buy-out are fair and adequate. In situations where companies have consummated these transactions at values less than fair market value, we work with attorneys and shareholders to exercise their appraisal rights.
- Equity Conversion — We partner with clients to change their capital structure with the goal of making the company’s capital structure more stable. Often clients convert one class of stock into multiple classes of stock for succession planning purposes and for minimizing gift and estate taxes.
- Management Buy-Outs — We work with management and shareholders to complete the acquisition by existing and new management teams of stock in family businesses. There is typically a ‘win-win’ situation from effectively providing a liquidity event for shareholders and ensuring the continued success of family businesses, and aligning financial incentive with management’s productivity.
- Shareholder Redemptions — Oftentimes there are limited opportunities for minority shareholders to liquidate their stock. We have worked with several boards of directors to establish the appropriate price to create liquidity for their shareholders. Often, reducing the number of extended family shareholders is an indirect benefit to our closely held clients.