Fairness opinions and solvency opinions
Deals are opportunities for faster growth, stronger capabilities and significant transformations, but success is not guaranteed. In sensitive transactions like spin-offs, sales, reorganisations, mergers and acquisitions, and significant related party transactions, executives and board members need reliable and independent financial advices to ensure informed decision-making that leads to enhanced performance, better returns and risk mitigation.
PwC’s Deals professionals provide independent fairness opinions and solvency opinions to corporate boards of directors, special committees and other stakeholders to ensure the proposed transactions are fair and reasonable, helping companies to improve the likelihood of deal success.
Fairness opinions
In today’s environment of heightened regulatory scrutiny and improved corporate governance, greater emphasis has been placed on the independence, transparency and rigour of fiduciary due diligence. Failure for the fiduciary to meet these expectations can result in costly consequences, including being held personally liable or damaging the interests of shareholders. Prudent directors involving in a potential transaction should consider retaining fairness opinions from an independent expert who is not providing financial advices to the companies involved in the deal.
Our team of experienced professionals are devoted and skilled in analysing and valuing different types of change of control transactions, including affiliate and insider transactions, tender offers, spin-offs and leveraged buyouts. Our work in this area spans from analyses for large transactions involving multibillion-dollar public companies to transactions involving multimillion-dollar private companies.
Solvency opinions
Boards of directors and lenders often require a solvency opinion as additional protection in leveraged transactions, stock redemptions and dividend distributions. A solvency opinion provides boards and lenders with additional protection against a fraudulent conveyance attack.
In situations where a fraudulent conveyance is proven, the transfer will be set aside. The parties involved could incur other penalties such as recovery of costs involved and punitive damages.
An independent solvency opinion from PwC would provide directors and lenders with a complete understanding of a company’s solvency, substantially reducing the threats of a fraudulent conveyance.
