Is Your Company in the Market for a Fairness Opinion?

Is Your Company in the Market for a Fairness Opinion?

Is that really fair? In my opinion, yes it is. Obviously a fairness opinion is much more than that in the financial and business world. So what is a fairness opinion, exactly? One of the final parts of any sale or merger is a fairness opinion, wherein an independent financial advisor gives a complete review of the financial aspects of a given transaction to the board of directors to the companies involved.

The financial advisor must look at every aspect of the deal in regards to financing, including pricing and compare those aspects to the market for similar businesses. After his or her review, the financial advisor must then either agree or disagree that the transaction is fair from a financial aspect, including whether or not it’s fair to minority shareholders.

A fairness opinion is important because it demonstrates that the company’s board of directors is doing its due diligence in order to prove that it is acting in the company’s shareholders’ best interest. This can help shareholders see that the board’s decisions are financially sound.

Although statutes or regulations do not require fairness opinions, they can be very helpful in any merger or acquisition process. At GROCO, we have years of experience providing business valuations and fairness opinions for hundreds of different companies and we can help you too. Just click here to learn more about fairness opinions or click here to contact us.

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