Evaluations of the underlying profitability of manufacturing entities demonstrates higher buyout price for minority shareholder

Our client’s need

Baker Tilly was retained by counsel for the minority shareholders to rebut the opposition’s (majority shareholders) low offering price for the buyout of several entities. The offering price was less than half of the value sought by the minority shareholders. The dispute was among third-generation relatives, which required sensitivity and efficiency when requesting and obtaining necessary data to challenge the historical cash flows. 

Baker Tilly solution

Baker Tilly’s analysis supported a significant increase the offering price by identifying non-operating charges (perquisites, payroll for relatives, among others) that were included in the historical cash flows. Moreover, Baker Tilly identified numerous comparable and timely transactions which supported higher multiples of cash flows.   

Results achieved

The analysis was presented to a neutral valuation firm which formed the basis for an eight-figure buyout award at an amount comparable to the minority shareholders’ estimated value. One of the minority shareholders stated, “We were extremely fortunate to have [Baker Tilly] on our side. Truly, we can’t thank you enough.”

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