ESOP put option argument for mitigating DLOM is ‘fallacious,’ says new article
“Virtually every ESOP appraisal that has been written in the past 10 years has concluded that, both in the case of purchases of company stock by an ESOP from direct shareholders and in the case of subsequent distributions and repurchases of company stock to and from plan participants, the discount for lack of marketability is [...]
Is the IRS ‘overcritical’ of data sources in its DLOM Aid? (download it for free at bvresources.com)
Attorney and BV insider Paul Hood provides an executive summary of the IRS Discount for Lack of Marketability Job Aid on his recent blog, The Business Valuation Reviewer’s Handbook. “On the whole, the Job Aid is fairly well done,” Hood says, although it is not without its problems. For instance, “the Job Aid left out several other DLOM [...]
‘Minority premium’ model may not comply with FMV standard
The recent BVWire item, “New model says any fractional discount above 30% merits serious consideration and support” inspired Robert Buchanan (PCE Valuations) to write: “‘Minority Premium’? Really?” i in PCE’s newsletter All About Value. “Much of the logic behind the model and the theory are valid in a world where one considers specific buyers,” says [...]
60% DLOM or more? Look at Valuation Advisors’ new long pre-IPO timeframe data
Valuation Advisors has released today an major additional dataset for transactions where the pre-IPO timeframe is two years or longer. Why? It takes most closely held businesses a long time to find a buyer for a 100% interest. For interests less than 100%, the timetable is even longer. Currently there are no definitive studies [...]
Direct secondary market sales: the trend continues to build
Direct, secondary market transactions among private equity companies are surging, according a recent survey by PitchBook (co-sponsor of the new PitchBook/BVR Guideline Public Company Comps Tool™). Already, PE investors have completed 56 deals this year—compared to only 45 for all of 2009. These sales accounted for nearly a third (28.1%) of total U.S. exit activity [...]
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