We understand that the level of complexity in a business valuation can often be just as high as the stakes. Determining the value of your company, its securities or its assets is critical in many merger, acquisition, tax planning, financial reporting and litigation situations.
We meet those challenges with comprehensive, objective and insightful advice for private and public companies across a wide range of industries. You can rely on our deep understanding of industry and operational knowledge to identify specific dynamics and issues affecting a company’s worth.
Knowing what your business is worth is a powerful tool for decision-making and is a meaningful benchmark for you and your team’s success. Sound, expert advice cannot be underestimated, when the equity in your business is most often the most significant asset in your portfolio.
Transactions and Restructuring
Our support with transactions and restructuring delivers the clarity you need to effectively manage the process and enhance overall shareholder value.
We assist buyers, sellers and lenders to develop and execute their goals, including:
- Determination of the overall business value and the pro-rata allocation of the value to shareholders
- Analysis of the business strategy, identification of financial objectives and planning for strategic positioning of the business in a sale, merger or acquisition
- Extensive qualitative and quantitative market and competitive analysis including a review of comparable companies and precedent transactions for appropriate valuation multiples
- Detailed historic and forecast financial analysis with focus on value, including normalization adjustments to earnings, working capital target calculations, quality of earnings review and forecast sensitivity analysis
- Preparation of investor correspondence, including confidential investment memorandums, executive summary and teaser documents, management presentations
- Identification of prospective buyer and capital targets
- Review and analysis of expression of interest or letters of intent; assistance in negotiating final transaction price
- Calculations of net proceeds to shareholder for tax and financial planning purposes
- Advice in capital and corporate structuring
- Manage due diligence process for both buyers, sellers and lenders
- Review and analysis of documentation including purchase and sale agreements, shareholder and employment agreements, financing arrangements in order to close on the transaction
- Purchase price allocation calculation
Corporate reorganizations may be required in order to structure a company based on an owner’s evolving needs. Our team of professionals work closely with you and your legal and accounting advisors to determine the most effective structure for your corporation given your company’s current situation, future goals, and considering current and planned tax laws.
The reasons for a corporate or business restructuring may include:
- Tax planning
- Family succession planning
- Sale of your business
- Incorporating a business
- Purchase of another business
- Cross-border tax planning
- Creditor protection for your business
In each circumstance, knowing your company’s worth will enable you to make informed decisions for you, your family and your business.
Capital Assist provides independent and expert advice on valuation and quantification of economic damages in litigation matters.
We review and analyze the financial data, validate our conclusions, prepare our opinion reports and calculations, provide consulting and expert testimony for trial, mediation and alternative dispute resolution in valuation and damage matters involving:
- Commercial and civil litigation matters
- Family law matters
- Shareholder disputes and oppression remedies
- Class action
- Tax disputes
Accounting and Income Tax Compliance
With extensive experience in valuing business interests, securities, tangible and intangible assets, we provide both public and private companies, valuation services to address their accounting and income tax compliance matters. We prepare valuation reports with clear, concise and supported valuation conclusions required to meet the relevant accounting standards and withstand scrutiny by the tax authorities.
Our independent, objective valuations are required to support the following accounting and income tax compliance matters:
- Corporate reorganizations such as tax-deferred rollovers – Section 85, Section 86 and Section 51(1)
- Start-up business
- Family business planning
- Non-arm’s length sale of shares
- Share exchange (in reorganizations)
- Share conversion or exchange of convertible property for shares
- Impairment testing
- Purchase price allocation for business combinations
- Push-down accounting to the acquirees
- Death of a Taxpayer
- Deemed Dispositions for Trusts
- 21-year deemed realization rule (family trusts, testamentary trusts)
- Alter-ego trusts upon death of spouse beneficiary
- Spousal trusts upon the death of the settlor
- Gifting (avoid attribution rules)
- Income splitting
- Legacy planning
- Family law
- Donations of Property (“gifts in kind” to determine if there is an income inclusion that may arise)
- Life insurance policies
- Shareholder benefits –Subsection 15(1) of the Act
- Private company employee stock option transactions
- Becoming a non-resident of Canada
Tax Dispute Resolution
Tax lawyers, taxpayers, and tax authorities are involved in a variety of disputes at the appeals stage and at all levels of Court in Canada in respect of the valuation of shares or assets, intellectual property and other intangibles. Our team of experienced Chartered Business Valuators provide trusted analysis, opinions and evidence to advise and assist in resolving tax disputes in the following situations.
- Estate freezes
- Corporate reorganizations
- Emigration of shareholder
- Death of a shareholder
- Eligibility of the Lifetime Capital Gains Exemption on the disposition of shares by a taxpayer
Shareholder agreements provide a road map for decision making between business owners and need to be carefully crafted to ensure the best outcomes.
There are various events in the business life cycle that trigger a valuation, including:
- A dissolution or buyout of your shares
- A shot-gun arrangement
- Transfer due to a marital breakdown
- A serious disagreement among shareholders
- Permanent disability
Federal and provincial business statutes also require a valuation be made as part of any proposed remedy to corporate oppression of minority shareholders. In every scenario, we carefully analyze the business dynamics and value catalysts underlying the business or a shareholder’s goals and arrive an independent, objective, expert conclusion to meet your needs.
Our team of professionals can help you in identifying intangible assets developed or acquired with a business. Valuing intangible assets for a potential sale or for an allocation of the purchase price in a recent acquisition requires detailed understanding, review and analysis of the applicable valuation methodologies ascribed to the intangible asset.
The fair value of certain intangible assets acquired may include, but is not limited to,
- Patents and proprietary technology;
- Above or below market contracts;
- Customer relationships;
- Non-compete agreements or covenants;
- Trademarks and tradenames, and,
- Workforce in place.
Intangible asset valuations are required for many purposes, including:
- Financial reporting purposes
- Purchase price allocations (PPA)
- Asset impairment testing (goodwill and other intangible assets)
- Purchase and sale transactions
- Accounting compliance on business combinations
- Tax planning for corporate reorganization
- Transfer pricing
Estate and Succession Planning
A key element in estate and succession planning is establishing the fair market value of the underlying assets or shares to be transferred or disposed of, in order to assess the tax consequences of the transaction. Our team of Chartered Business Valuators prepare independent valuations to provide a fair and objective basis for fair market value which can mitigate against potential dispute or challenge by the tax authorities or assist a shareholder in succession planning. A valuation opinion by an unqualified accountant or advisor can lead to inadequate fair market value assessments, which can result in penalizing tax consequences and costly appeals or litigation.