Public companies that are sold or have significant portions of their business sold, and private companies with a diverse group of minority shareholders, may require a fairness opinion for regulatory purposes.  A fairness opinion is an investment banker’s opinion that is an independent objective analysis, from a financial point of view, as to the fairness of the financial terms of a corporate transaction.  There are many reasons for fairness opinions, most of which deal with transactions involving securities of closely-held and publicly-traded companies.  An independent opinion of fairness relative to the exchange of values can provide substantial support for such exchanges.  Furthermore, independent fairness opinions are useful as a defense against dissident shareholder claims.

 With a fairness opinion, the investment banker assumes a degree of litigation risk on behalf of the company.  As a result of this risk, a fairness opinion is valued and priced relative to size, shareholder makeup, litigation potential, and the audience for the opinion.  Opinions with limited circulation will be less expensive than opinions for publication in widespread documents such as SEC filings.

 Spencer Edwards has substantial expertise in the private equity and public company arena and can assess and resolve fairness issues by working closely with company advisors.  Spencer Edwards is qualified to provide fairness opinions for public transactions as well as for complex private equity dealings.  Extensive due diligence is required and will typically include, among other things:

• Interviewing key management and key company professional advisors
• Visiting major company facilities
• Analyzing historical financial statements
• Reviewing transaction documents
• Researching industry information
• Applying certain valuation standards

Several different factors in deals involving both public and private companies can trigger the need for a fairness opinion.  Spencer Edwards is experienced with a variety of change of control situations and can prepare fairness and valuation opinions for the following:

• Public Offerings
• Stock and Asset Acquisitions
• Going Private Transactions 
• Sale Transactions without competing offers
• Affiliate and Insider Transactions
• Backstop Fairness Opinions / Second opinions
• Private Placements
• PIPE transactions (Private Investment in Public Equity)
• Special Purpose Acquisition Corporation ("SPAC") Transactions
• Parity Mergers and Reverse Mergers
• Bankruptcy Emergence Related Transactions

As a registered broker-dealer and FINRA member, Spencer Edwards can offer a variety of financial opinions that assist special committees, business owners, outside Board of Directors, financial institutions, and other fiduciaries, with complex financial decisions that are seldom straight-forward and unambiguous.  Spencer Edwards is well qualified to assist with financial opinions involving mergers & acquisitions, capital restructuring, and SEC related issues.

A financial opinion analyzes the price, terms and transaction details of a merger or acquisition.  It looks at different valuation metrics and then makes comparisons to the current transaction.  In preparing a financial opinion or a valuation, Spencer Edwards' professionals and valuation consultants utilize a number of widely-accepted valuation methodologies and techniques, which may include the following:

• Financial statement review
• Industry analysis
• Outlook analysis
• Analysis of intangible assets
• Discounted cash flow analysis
• Comparable company analysis
• Comparable transaction analysis
• Analysis of stock price and volume history
• Leveraged recapitalization analysis
• Breakup analysis
• Contingent payment review
• Net asset value analysis

Other valuations are required for various activities.  Among them are:

• Selling a Company
• Purchasing a Company
• Raising Funds
• Joint Ventures

Spencer Edwards will use standard and non-standard techniques to identify and maximize the value.  Furthermore, Spencer Edwards will be able to effectively and professionally substantiate this valuation.