M&A Talk: #1 Podcast on Selling a Business31 Jul 2024

For Experienced Sellers: Navigating Partnership Disputes -- Lessons from a Valuation Expert

View the complete show notes for this episode.

What impact can a partnership dispute have on the value of a company? What is the difference between a legal valuation and a market-based valuation for M&A purposes? Expert appraiser Andy Frew answers these questions and more as he discusses what's involved and what can go wrong with valuations involving companies that have a partnership dispute arise. He covers the complexities of valuing partnership interests and establishing a thorough valuation methodology to prevent disputes from escalating.

What You'll Learn

Standards of Value: An explanation of the three types of standards of value – fair market value, investment value, and fair value – and when each is used.
Triggers: What can cause a partnership split or a dispute and the complexities involved in valuing minority interests in privately held businesses.
Experience: The critical role of experience and credentials for appraisers, especially when their work may be challenged in court or by regulatory bodies like the IRS.
Differences in Valuations: The distinction between valuations for legal purposes (e.g., partnership disputes, estate taxes) versus market-based valuations for M&A transactions.

Want More? Related Resources:

Books Mentioned:

Buy-Sell Agreements for Closely Held and Family Business Owners by Z. Christopher Mercer
Quantifying Marketability Discounts by Z. Christopher Mercer
Business Valuation: An Integrated Theory (Wiley Series in Finance) by Z. Christopher Mercer and Travis W. Harms
Valuing a Business, 6th Edition: The Analysis and Appraisal of Closely Held Companies by Shannon P. Pratt and the ASA Educational Foundation
Cost of Capital, + Website: Applications and Examples (Wiley Finance) by Shannon P. Pratt (Author), Roger J. Grabowski (Author), Richard A. Brealey (Foreword)
30-Second Economics by Donald Marron

Additional Resources:

Planning to sell your business? Schedule a free consultation today.
Download a free PDF copy of The Art of The Exit: The Complete Guide to Selling Your Business, Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue, and Food and Beverage M&A: An Insider's Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.
Purchase your copy now of A Beginner's Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal

Listen to Other Episodes

M&A Valuations in the Real World with Abhi Mathews
The Art and Science of Valuing a Middle-Market Business with Kevin Moyer and Megan Sartor
What Does the Future Look Like for Middle Market Valuations? with Bill Wiersema

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