Settling a Valuation Dispute with Active Shareholders

April 12th, 2010

When shareholders cannot agree on business valuation
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Challenge
When the shareholders of Massachusetts-based American Profit Recovery wanted buy out an active partner, the partnership group initially tried to orchestrate the transaction in-house. However, even with the help of CPAs and attorneys on both sides, six months of effort produced no results and a "deadlocked" deal.

Solution
The partners had originally contemplated hiring Kaulkin Ginsberg at the beginning of the process to develop a detailed valuation report. When it became clear that they were unable to complete the transaction on their own, they hired us as industry valuation experts to advise them; we would determine the value of the agency and the active partner’s stake, and then work through the buy-out discussions with the active partner. Given the substantial sales/marketing role played by the departing shareholder, it was critical to put together a buy-out structure that did not severely impact the agency’s cash flow.

Kaulkin Ginsberg has conducted hundreds of industry valuations – many involving the buy-out of an active shareholder. Our experience enabled us to quickly understand the situation at hand between the shareholders, review historical and current financial statements and the buy-out model, and provide valuation guidance via multiple conference calls.

Our valuation assessment and market trend guidance was both realistic and respected by both sides.  This gave the "ammunition" the shareholders needed to facilitate an amicable resolution within weeks of engaging us. “We obviously expected expertise and professionalism,” noted Jeff DiMatteo, Partner at American Profit Recovery when asked about Kaulkin Ginsberg’s services, “but their team’s results exceeded our expectations.”

What Can We Do For You?

Contact Mike Ginsberg,  at 240-499-3800 or by email to confidentially discuss your interests.

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