Businesses

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Data Required

Independent Appraisal (IA) has been providing valuations since 1989. While there have been many changes in ESOP administration, IA continues to provide quality services while keeping abreast of the latest changes in government regulations and industry trends. As a small firm, we take pride in our ability to provide personal and responsive service to all our clients, large and small. Our attention to detail, dedication to excellence, and prompt customer service are qualities our clients have come to expect from us.

In undertaking an appraisal assignment a rigorous research and analysis process is accomplished to satisfy the standards of ERISA but more particularly, to satisfy the fiduciary needs of the Trustee(s). To reach a final opinion of value generally includes the following:

  • Data Collection:
    • Information provided by the Client historical financial data and other information;
    • Relevant industrial data, national, regional and local, economic information;
    • Information on public companies in the same or similar industry;
    • Information on public and/or private business clients from the market regarding the amount at which similar business interests have sold;
    • Rates of return available on investments of similar risk and investment characteristics;
    • Support for discounts and premiums as may be applicable.
  • On-site visit: A tour of facilities and meetings with management to discuss the company’s operations and outlook.
  • Analysis: The data that has been gathered will be analyzed and valuation methods appropriate to the assignment will be selected.
  • Indications of value are developed using the selected valuation methods to include applicable rates of return and expected growth rates.

The valuation report is prepared and designed to explain our appraisal process including: the research performed, the analysis of company and industry data, the development of the selected rates of return and growth, valuation methods employed, discounts applied, and the reconciliation of values indicated by the various methods utilized.

We work closely with our clients to ensure our reports are fully understood. What is important to the Trustee, and to us as an advisor, is that the prudent businessman’s standard of care required of the Trustee under ERISA is met in fulfilling their responsibilities. Our valuation and reports are completed with this objective in mind.

IA is a small firm that provides to our client’s individual care and service at an affordable fee. The assignment will be undertaken in a consistent and professional manner that will be responsive to the needs of your company. We will make every effort to work with your management team and ESOP Trustees to provide to you state-of-the-art appraisal services in a timely and efficient manner.

If you are considering having a valuation of your Company’s ESOP, we would be glad to provide you with a packet detailing information about our company and the valuation process. Please call us toll free at (800) 929-3914 or email us from the Contact Us page of this website. We would be happy to discuss your valuation needs at your earliest convenience.

Data Required for Appraisal of a Business

Please review the following list and provide as much information as possible. We understand the list of required information is quite lengthy and detailed; however, the items are necessary to produce an accurate, well-informed appraisal report of your company. In addition to these items, you will need to fill out a company information questionnaire.

Required Items

  1. Financial statements and tax returns with any attachments for five years, including this year.
  2. Five year projections of sales, pre-tax and pre-contribution earnings, covered payroll and amount or percent of covered payroll, going to stockholder-employees. (Pre-contribution refers only to discretionary employer benefit plans).
  3. History and description of the company along with plans for the future (five years).
  4. Short resume of key employees; number of the total employees, union and non-union.
  5. List of stockholders owning common stock, include number of shares.
  6. Planned major capital expenditures and/or debt reduction requirements, next five years. Provisions of any debt instruments concerning capital stock.
  7. Industry information; size of your market, primary competition, intermediate terms prospects, comparable publicly held companies, trade publications.
  8. Capital account analysis (five years) and any recent sales or trade of stock of your company. Number of shares outstanding, in hands of public, net of treasury shares.
  9. Buy-sell agreements, stock options granted or exercised, prior valuations, stock redemptions, etc. Any properties and/or investments not necessary to the operations of the company.
  10. Information on all existing employee benefit plans on covered payroll employees. Contribution to these plans for five years. Please note whether contributions are mandatory or discretionary.
  11. Outline of products and/or service categories and estimated contribution to sales and to profits. Identify all business locations and subsidiaries.
  12. Method of distribution, discount structure, if any, list of representatives, distributors, wholesalers and a list of major suppliers and major customers.
  13. Management’s estimate of Fair Market Value, if any, and basis for this determination.
  14. Any other data which you feel would be pertinent to the determination of value of the company as a whole. This would include any merger offers, serious discussions among “control” stockholders concerning ownership plans, proposed or actual registrations and offerings, applications to SBA or insurance companies for long-term debt, and other similar planned or actual transactions.