marshall
With Experience Comes a Wealth of Knowledge and Expertise Established in 1932, Marshall & Stevens is a recognized leader in valuation, serving business owners, managers, boards and trusted advisors throughout the world. We assist our clients with planning, due diligence, negotiation and reporting issues related to their mergers, acquisitions, divestitures, financings, insurance and wealth and tax transfer transactions. Our in-house specialists provide a full complement of valuationrelated services, from transaction advisory and opinion letters to the valuation of businesses and business assets, both tangible and intangible.
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houston
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+ Fairness and Solvency Opinions
+ Commercial Real Estate and + Machinery and Equipment Valued for: — Collateral Lending including Structured Finance — SOX 404(b) Requirements, Material Disclosure — Insurance Placement and Loss — Property Tax Reporting and Dispute
+ Business Valuation + Partial Interest (“Discount”) Studies + Subchapter C to S Conversions + ESOP Valuations + + +
Restricted Stock Studies (Rule 144 Stock) Stock Options and Warrants (SFAS 123R, IRC Sec. 409A) Worthless Securities (IRC Sec. 165)
+ Asset Verification and Valuation + Buy/Sell Valuation and Negotiation + Earn Out Valuations + ESOP Formation Analyses + Purchase Price Allocations (SFAS 141) + SFAS Compliance
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Corporate Recapitalizations (IRC Sec. 368)
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Fresh Start Accounting (AICPA SOP 90-7)
Debt Forgiveness (IRC Sec. 108) Debt Instruments Valuations
Net Operating Loss Carryforwards (IRC Sec. 382)
Intangible Asset Valuations +
Covenants Not-To-Compete, Customer Lists, Goodwill, IPR&D, Media Libraries, Patents, Software, Trademarks, Tradenames, etc.
Kevin Hanson Principal P: 213.612.8000 x 1507 khanson@marshall-stevens.com
los angeles
Bankruptcy, Restructuring & Reorganization
Transaction — Due Diligence, Negotiation and Reporting
We do not waver on our promise to be timely in our work, communicate openly with our clients, and present well-written reports — all for reasonable fees.
chicago
Tangible Asset Valuations
Securities and Capital Stock
The work Marshall & Stevens prepares is regularly reviewed and accepted by national and international corporations, their law, audit, financing and insurance firms, as well as government and regulatory agencies such as the IRS and SEC. We are recognized for the quality of our work, independence, and ability to substantiate our conclusions.
Gregg Dight Principal P: 212.425.4300 x 2102 gdight@marshall-stevens.com
Opinions
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new york
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Chris Louis Principal P: 312.223.8477 x 1810 clouis@marshall-stevens.com
philadelphia
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san francisco
Louis Yorey Senior Vice President P: 212.425.4300 x 2101 lyorey@marshall-stevens.com
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st. louis
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tampa
marshall
SFAS 141 for Real Estate Does your recent acquisition of real estate comply with SFAS 141?
“ It has been my experience
Many lenders, investors and, therefore, auditors are requiring public and many private companies to have a purchase price allocation of acquired real estate compliant with the Statement of Financial Accounting Standards 141: Business Combinations (“SFAS 141”). To comply, the value of each real property component must be allocated, as follows: + + + + +
that Marshall & Stevens has a thorough understanding of SFAS 141, for real estate as well as corporate acquisitions. I have great confidence in their skills
Land Site Improvements Building Tenant Improvements Intangibles assets: – Existing leases (above or below market value) – Tenants in place (vacancies) – Remaining value of tenant improvements – Customer relationships
and know that my clients will be treated well by the Marshall and Stevens professionals.” Gale B, Moore, CPA Partner, Singer Lewak Greenbaum & Goldstein, LLP Auditor, American Commercial Equities
If real estate leases, not real property, were acquired, these leases must be subjected to an analysis to determine if they are above or below market and booked accordingly. SFAS 141 Compliant
The SFAS 141 analysis can be applied to property tax reporting and an accelerated depreciation analysis.
Purchase Price Allocation of 38 Properties acquired by
For over 75 years, Marshall & Stevens has been playing an integral role in business transactions, providing analyses and peace-of-mind to corporate executives, directors, and shareholders. We do not waver on our promise to be timely with our work, communicate openly with our clients, and present well-written reports — all for reasonable fees. Our real estate valuation staff works in coordination with our other valuation practices to provide our clients with the best analyses of their assets, both tangible and intangible, tailored to the client’s specific situation and circumstances, including:
American Commercial Equities
+ Mergers, Acquisitions and Divestitures + Financial Compliance + FIRPTA + Wealth and Tax Transfer Transactions + Financings Lance Biernbaum Vice President P: 813.962.7888 x 5306 lbiernbaum@marshall-stevens.com
chicago
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houston
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Bill Schoenhut Senior Vice President P: 215.561.5600 x 5035 schoenhut@marshall-stevens.com
los angeles
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new york
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Wayne Wnek Senior Vice President P: 312.223.8477 x 1911 wwnek@marshall-stevens.com
philadelphia
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san francisco
Louis Yorey Senior Vice President P: 212.425.4300 x 2101 lyorey@marshall-stevens.com
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st. louis
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tampa
Real Estate Purchase Price Allocation Case Studies SFAS 141 Compliant
CB Richard Ellis Group,
Purchase Price Allocation of 65 Properties acquired by
SFAS 141 Compliant
Inc. (NYSE: CBG) engaged
Purchase Price Allocation of 38 Properties acquired by
Marshall & Stevens’ National CB Richard Ellis Group, Inc. (NYSE: CBG)
as part of its acquisition of
Equities, a privately held real estate investment
Real Estate Services practice
company, engaged Marshall
t o p rov i d e S FA S 1 4 1
& Stevens’ National Real
compliant purchase price
Estate Services practice
allocations of 65 properties
Trammel Crow Company (NYSE: TCC)
A m e r i c a n C o m m e rc i a l
American Commercial Equities
t o p rov i d e S FA S 1 4 1
(10.6 million leaseable
compliant purchase price
square feet) as part of its $2.2 Billion acquisition of Trammel
allocations of 36 storefront retail properties located in
Crow Company (NYSE: TCC). The property types, located
Beverly Hills, Dana Point, La Jolla, Los Angeles, Newport
across the United States, included: healthcare, industrial,
Beach, Paso Robles, San Diego, Santa Monica, West
office, residential and retail.
Hollywood and Ventura, as well as two self-storage facilities in Canada.
Multidisciplinary Purchase Price Allocation Case Studies Complete SFAS 141 Compliant
Marshall & Stevens was
Complete SFAS 141 Compliant
engaged by CasaBlanca
Purchase Price Allocation of Three Casinos and a Golf Course acquired by
Purchase Price Allocation of Paramount Petroleum Corp. acquired by
Resorts, LLC to perform a
engaged by ALON USA Energy, Inc. (NYSE: ALJ) to
complete, multidisciplinary
perform a complete, multi-
purchase price allocation
disciplinary purchase price
(intangible assets, machinCasaBlanca Resorts, LLC
Marshall & Stevens was
allocation (intangible assets, ALON USA Energy, Inc. (NYSE: ALJ)
ery and equipment, and
machinery and equipment,
real estate), compliant with
and real estate), compliant
SFAS 141, for its acquisition of three Casinos and a golf
with SFAS 141, for its acquisition of Paramount Petroleum Corp.
course in Nevada.
chicago
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houston
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los angeles
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new york
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philadelphia
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san francisco
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st. louis
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tampa
marshall
Stock Option Valuations (IRC 409A / SFAS 123R)
Stock Options have been issued to employees, but how was the price and value determined? How will pricing and value be determined going forward? •
Is your board or auditor concerned that the IRS would interpret the data differently and derive a different (higher) value for the options?
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Did an independent third-party expert determine the market value of the stock or was a “market price” or “recent” transaction price used?
Was the option value determined using a Black-Scholes or a binomial lattice model? How were the inputs derived for the model?
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Valuation of Stock Options Compliant with SFAS 123R and IRC 409A for
Flektor Inc.
How can your company benefit from an analysis performed for compliance purposes?
It is important that a proper valuation of the stock in the company be performed as part of the stock option analysis. Remember, the IRS has hindsight on its side if it decides to audit your reports.
For over 75 years, Marshall & Stevens has been playing an integral role in business transactions, providing analyses and peace-of-mind to corporate executives, directors, and shareholders alike. We do not waver on our promise to be timely with our work, communicate openly with our clients, and present well-written reports — all for reasonable fees.
Valuation of Stock Options Compliant with SFAS 123R and IRC 409A for
Amyris Biotechnologies
Our financial valuation staff spends the necessary time with its clients to understand the unique value drivers of each client’s business. We work with companies of all sizes and in most every industry and tailor the analysis to the client’s specific situation and circumstances, including: + Mergers, Acquisitions and Divestitures + Financial Compliance + IPO preparation + Wealth and Tax Transfer Transactions + Financings Kevin Hanson Principal P: 213.612.8000 x 1507 khanson@marshall-stevens.com
Chris Louis Principal P: 314.621.7025 x 1810 clouis@marshall-stevens.com
Bob Mulhearn Vice President P: 215.561.5600 x 5065 bmulhearn@marshall-stevens.com
John Ryan Senior Vice President P: 813.962.7888 x 5309 jryan@marshall-stevens.com
chicago + houston + los angeles + new york + philadelphia + san francisco + st. louis + tampa
Representative Engagements Valuation of Stock Options Compliant with SFAS 123R and IRC 409A for
Flektor Inc.
Marshall & Stevens was engaged by Flektor, Inc., to value its stock options granted
Valuation of Stock Options Compliant with SFAS 123R and IRC 409A for
Marshall
&
Stevens
was engaged by Amyris Biotechnologies to value
to employees. Founded in
its stock options to be
2006 and based in Culver City,
granted. Headquartered
California, Flektor, Inc., is a
in Emeryville, California,
state-of-the art web-based
Amyris Biotechnologies
video and audio editing, storage and posting site.
Amyris Biotechnologies is dedicated to improving the
world by leveraging breakthroughs in synthetic biology. Amyris’ technology is able to provide a consistent, costeffective supply of biofuels and other high-value natural compounds, including pharmaceuticals, fine chemicals, and nutraceuticals
Valuation of Stock Options Compliant with SFAS 123R and IRC 409A for
DevZuz
Marshall & Stevens was engaged by DevZuz to value its stock options.
Valuation of Stock Options Compliant with SFAS 123R and IRC 409A for
Marshall & Stevens was engaged by XLNT Veterinary to value its stock options
Headquartered in Marina del
granted to employees.
Rey, California, DevZuz offers
Headquartered in San Jose,
a proven, scalable delivery
CA, XLNT Veterinary, also
platform built to enable IT organizations to rapidly and
predictably extract value from the use of open source projects
XLNT Veterinary Care, Inc.
known as PetDrx, manages over 20 veterinary clinics
throughout the state of California.
during the development process.
chicago + houston + los angeles + new york + philadelphia + san francisco + st. louis + tampa
marshall
Fairness Opinions Fairness Opinion and Exclusive Financial Advisor to
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Is the price fair to the shareholders?
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Are the directors acting in good faith?
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Has an independent third-party opined on fairness?
for its merger with
For over 75 years, we have been playing an integral role in business transactions,
Collegiate Pacific, Inc. (AMEX: BOO)
Sport Supply Group, Inc. (AMEX: RBI)
providing analyses and peace-of-mind to directors and shareholders alike. We do not waver on our promise to be timely with our work, communicate openly with our clients, and present well-written reports — all for reasonable fees.
“ As a director of a public company charged with completing a
Our Fairness and Solvency Opinions, transaction advice, financial analysis and due diligence services are used by boards of directors, trusted advisors, management and business owners throughout the world for:
unique and tough merger, I needed a firm that could provide a quality fairness opinion in a very timely manner. Upon
+ Mergers, Acquisitions and Divestitures
interviewing Marshall & Stevens,
+ Financial Compliance
I immediately recognized the
+ Wealth and Tax Transfer Transactions
fit based on their experience,
+ Financings
commitment and responses. The firm has great professionals and delivered as promised.” Paul Schlosberg Former Director Sport Supply Group, Inc.
Kevin Hanson Principal P: 213.612.8000 x 1507 khanson@marshall-stevens.com
Craig Tompkins Vice Chairman P: 213.612.8000 x 1606 ctompkins@marshall-stevens.com
Chris Louis Principal P: 314.621.7025 x 1810 clouis@marshall-stevens.com
John Ryan Senior Vice President P: 813.962.7888 x 5309 jryan@marshall-stevens.com
chicago + houston + los angeles + new york + philadelphia + san francisco + st. louis + tampa
Representative Engagements Fairness Opinion and Exclusive Financial Advisor to
Sport Supply Group, Inc. (AMEX: RBI)
for its merger with
Marshall & Stevens provided a
Marshall & Stevens issued
Fairness Opinion to the Special
a Fairness Opinion to the
Committee of the Board of
Board of Directors of Host
Directors of Sport Supply Group, Inc. (“SSG”) (AMEX: RBI) regarding the company’s
Collegiate Pacific, Inc. (AMEX: BOO)
Fairness Opinion and Exclusive Financial Advisor to
merger with Collegiate Pacific,
Host America Corporation (OTCPK: CAFE)
for its sale of Host America Corporate Dining to a Private Buyer
America Corporation (OTCPK: CAFE) regarding the sale of its operating subsidiary, Host America Corporate
Inc. (AMEX: BOO). Marshall
Dining (“Corporate Dining”),
& Stevens found the consideration being paid by Collegiate
to a private buyer. After considering Corporate Dining’s
Pacific to be insufficient and, at the request of the Special
forecasted earnings and market conditions, we concluded
Committee of SSG’s Board of Directors, negotiated consideration
that the consideration to be received by Host America’s
superior in total amount and structure for SSG’s shareholders.
shareholders was fair from a financial point of view. The
The transaction subsequently closed as revised.
transaction closed on time and as structured.
Fairness Opinion and Exclusive Financial Advisor to
Point.360 Group (Nasdaq: PTSX)
for the sale of a business unit to
Marshall & Stevens was
Marshall & Stevens was
engaged by the Board of
engaged by the Special
Directors of Point.360 Group
Committee of the Board of
(NasdaqGM: PTSX) to provide
Directors of Inland Real Estate
a Fairness Opinion with respect to the sale of a significant
DG FastChannel (Nasdaq: DGFT)
Fairness Opinion and Exclusive Financial Advisor to
business unit of Point.360 to
Inland Real Estate Group of Companies, Inc. (NYSE: IRC)
Regarding a Joint Venture
Group of Companies, Inc. (“Inland Real Estate”) (NYSE: IRC) to provide a Fairness
DG FastChannel (NasdaqGM:
Opinion concerning Inland
DGIT). In addition, Marshall & Stevens was retained to prepare
Real Estate’s transfer of a retail shopping center in Terra
a Fair Market Valuation of Point.360’s remaining business to
Haute, Indiana into a joint venture. The engagement included
establish the value of the company’s publicly traded stock post
Marshall & Stevens’ valuation of the underlying real estate.
transaction. We concluded that the sale was fair to Point.360’s
We concluded that the transaction was fair from a financial
shareholders from a financial point of view and the transaction
point of view and it closed on time and as structured.
closed on schedule as structured.
chicago + houston + los angeles + new york + philadelphia + san francisco + st. louis + tampa
marshall
Solvency Opinions “ In our experience as investment bankers, the solvency opinion typically is requested late in the transaction process. It is imperative for the solvency opinion to be completed quickly and accurately in order to keep the deal on track. We refer Marshall & Stevens into these situations with confidence that they will commit the necessary resources to get the job done. Each time, they have delivered exactly as promised.�
Before committing to a recapitalization, management should consider:
Solvency Opinion $85,000,000 Recapitalization of an
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Has projected cash flow been subjected to sensitivity analyses?
Apparel Company
Los Angeles, CA marshall
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Will the company have sufficient capital to withstand potential operating shortfalls?
was retained for
the benefit of Shareholders & Lender
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Does the fair value of assets exceed the total value of liabilities?
Solvency Opinion
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Can the company meet each of its covenants throughout the life of the loan?
William K. Doyle Managing Partner Kerlin Capital Group
$298,000,000 Recapitalization of a National Construction Industry Company marshall
For over 75 years, we have been playing an integral role in leveraged transactions, conducting thorough analyses to protect lenders, shareholders, directors and their
was retained for
advisors. We do not waver on our promise to be timely with our work, communicate
the benefit of Shareholders & Lender
openly with our clients, and present well-written reports — all for reasonable fees. Our Solvency and Fairness Opinions, transaction advice, financial analysis and due diligence services are used by lenders, private equity funds, boards of directors, trusted advisors, management and business owners throughout the world for: + Mergers, Acquisitions and Divestitures + Financings + Wealth and Tax Transfer Transactions
Kevin Hanson Principal P: 213.612.8000 x 1507 khanson@marshall-stevens.com
chicago
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houston
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Craig Tompkins Vice Chairman P: 213.612.8000 x 1606 ctompkins@marshall-stevens.com
los angeles
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new york
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Chris Louis Principal P: 314.621.7025 x 1810 clouis@marshall-stevens.com
philadelphia
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san francisco
John Ryan Senior Vice President P: 813.962.7888 x 5309 jryan@marshall-stevens.com
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st. louis
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tampa
Representative Engagements In each of the following two representative engagements Marshall & Stevens applied solvency tests to determine if, post transaction: 1) The fair value of the company’s assets would exceed the total amount of the company’s debts; 2) It was reasonable to anticipate that the company would be able to pay its debts as they become due; 3) The company would have a reasonable amount of capital with which to engage in its business; 4) Based on the financial projections provided by management, it was reasonable to anticipate that the company would satisfy the financial covenants listed in the loan agreement for each of the forecasted periods; and 5) Assuming that the company performed at the levels projected by management, it was reasonable to anticipate that the company would be able to refinance the balloon payment of the subject debt securities at maturity.
Solvency Opinion
Solvency Opinion
The private equity investor
$85,000,000 Recapitalization of an
$298,000,000 Recapitalization of a
in a privately-held apparel
Apparel Company
National Construction Industry Company
company had structured a
Los Angeles, CA
leveraged recapitalization of
marshall
was retained for
by the company, for the benefit of shareholders and lender, to render an opinion as to the
marshall
solvency of the company after
the company, including the issuance of $85 million in new
the benefit of Shareholders & Lender
Marshall & Stevens was engaged
debt securities. The use of
was retained for
giving effect to the company’s
the benefit of Shareholders & Lender
proposed issuance of $298
proceeds from the transaction
million in new debt securities.
included a shareholder distribution. Marshall & Stevens was
The company’s intended use of the new funds was to:
engaged by the company’s board of directors, for the benefit
(1) repurchase outstanding shares of the company; (2) refinance
of shareholders and lender, to determine whether the company
existing debt securities; (3) pay transaction fees and other
would be solvent after giving effect to the transaction. Marshall
expenses associated with the transaction; and (4) fund general
& Stevens applied the financial tests described above and
corporate needs. Marshall & Stevens applied the financial
determined that the company would remain solvent. The
tests described above and determined that the company would
transaction closed as structured.
remain solvent. The transaction closed as structured.
chicago
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houston
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los angeles
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new york
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philadelphia
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san francisco
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st. louis
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tampa
marshall
Transaction Opinion and Advisory Practice Leadership Kevin R. Hanson
John J. Ryan, ASA
Principal, Financial Valuation and Consulting
Senior Vice President, Financial Valuation and Consulting
Mr. Hanson is the firm’s National Transaction Opinion and Advisory Practice Leader. He delivers Fairness and Solvency Opinions for public and private company transactions and leads complicated, multidisciplinary valuation assignments. He is an experienced financial advisor and strategic consultant relative to mergers, acquisitions, divestitures, financings, tax and financial reporting. Mr. Hanson previously was Vice President of Financial Services for Valuation Research Corp. and a Research Analyst with Robert W. Baird & Co., Inc.
Mr. Ryan has been actively involved in financial valuation for over twenty-five years including delivering Fairness and Solvency Opinions for public and private corporations and ESOP formations. Prior to joining Marshall & Stevens, Mr. Ryan held senior positions with several nationally recognized valuation firms including BDO Seidman, Deloitte & Touche and Arthur D. Little Valuation. Mr. Ryan has testified as a valuation expert in arbitration hearings and before state boards. jryan@marshall-stevens.com
khanson@marshall-stevens.com
S. Craig Tompkins, Esq.
Mark W. Santarsiero, CPA
Vice Chairman
President and Chief Executive Officer
Mr. Tompkins consults on Fairness and Solvency Opinions. He has structured mergers, acquisitions, divestitures and recapitalizations as a corporate officer and board member of several publicly traded entities. He also served as an advisor to numerous corporations while a partner with the law firm of Gibson Dunn & Crutcher. Mr. Tompkins’ recently served as President and a Director of Craig Corp., Vice Chairman of Citadel Holding Corp., Vice Chairman and Director of Business Affairs for Reading International, Inc. and Chairman of the Audit Committee and Director of G&L Realty Group.
Mr. Santarsiero led the management buyout for Marshall & Stevens in 1992 and has been the firm’s President and CEO since 2000. He previously was Marshall & Stevens’ Chief Financial Officer, its National Financial Valuation and Consulting Practice Leader, and a corporate controller for various subsidiaries of SGS, the publicly-traded, Swiss, former parent company of Marshall & Stevens. In this capacity, he was involved in numerous merger and acquisition transactions, including prospect identification, due diligence, negotiations and post-transaction integration. msantarsiero@marshall-stevens.com
ctompkins@marshall-stevens.com
chicago
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los angeles
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new york
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philadelphia
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san francisco
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marshall
Transaction Opinion and Advisory Practice Specialists G. Christopher Louis, ASA, MAI
Louis A. Yorey, MAI, ASA, MRICS
National Financial Practice Leader National Healthcare Services Practice Leader
National Real Estate Practice Leader Mr. Yorey leads real estate portfolio valuation assignments for a variety of property types relative to transactions, FIRPTA and financings. His valuation and consulting experience includes investment-grade properties in the local, national and international markets for numerous Fortune 500 companies.
A specialist in the area of healthcare and senior living, Mr. Louis’ experience includes the valuation of businesses and real property interests for transactions. Mr. Louis has prepared reports for numerous courts and boards and has testified as an expert witness before courts and boards in Missouri, Illinois, Ohio and Federal Bankruptcy Court.
lyorey@marshall-stevens.com
clouis@marshall-stevens.com
Alfred M. King, CMA Vice Chairman Litigation Support Specialist Financial Accounting Standards Expert Mr. King’s areas of expertise include the valuation of intangible/intellectual assets and businesses and valuation issues relative to solvency, reasonable equivalents, domestic and international taxes, and financial reporting. He has served as an expert witness before the Internal Revenue Service and various Federal and State Courts. Mr. King has authored nine books and numerous articles on valuation and has served on valuation committees for the Securities and Exchange Commission (SEC) and Financial Accounting Standards Board (FASB). aking@marshall-stevens.com
Kevin Hanson Principal P: 213.612.8000 x 1507 khanson@marshall-stevens.com
chicago
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houston
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Craig Tompkins Vice Chairman P: 213.612.8000 x 1606 ctompkins@marshall-stevens.com
los angeles
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new york
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Chris Louis Principal P: 314.621.7025 x 1810 clouis@marshall-stevens.com
philadelphia
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san francisco
John Ryan Senior Vice President P: 813.962.7888 x 5309 jryan@marshall-stevens.com
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st. louis
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tampa