Buy-Sell Valuations

Partners need a buy-sell agreement. 
Buy-sell agreements need a valuation. 

Why a Buy-Sell Valuation

A buy-sell agreement is a legally binding document that determines how a partner or shareholder in a closely held business may purchase the interest of another partner or shareholder who withdraws from the business. Integrating a business valuation into a buy-sell agreement is often critical to ensuring that all shareholders are treated fairly and equitably if one executes the agreement. Likewise, the absence of a buy-sell often triggers a valuation during partnership disputes.

Buy-Sell Valuation Scenarios – Some of the most common scenarios include:

Examples

  • No Buy-Sell

  • Shareholder Litigation
  • Initial Buy-sell

  • Death of Shareholder

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Triggering Events

There are many types of events that trigger the need for a valuation amongst shareholders. Those may include:

  • Shareholder disputes
  • Death of a shareholder
  • Insurance requirements

With regards to valuations of these types, our engagement is often guided by the terms laid out in the agreement when one exists. For instance, does the agreement provide for the application of Discounts for Control and Marketability? In other cases we are calculating value on a control / marketable basis regardless of the characteristics of the block of shares valued.

More Types of Business Valuations

INSURANCE

Quantive values companies for a variety of reasons related to insurance to include establishing values for funding buy-sell agreements.

OTHER

We perform valuations for business planning, gap analysis, lost profits and damages, and a variety of other reasons.

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