Anderson Economic Group has demonstrated expertise in finance and business valuation assignments, including business value opinions, intellectual property and franchise rights analyses, commercial damages estimates, antitrust economics analyses, and mergers & acquisition advice.
Appraising the value of a business or asset requires an analysis of the fundamental market, economic, and industry factors that determine the future profitability of a firm. These typically include a review of the relevant economic and business conditions, an analysis of the key products and services, a review of the competitive landscape, and an analysis of the relevant market. Depending on the purpose of the analysis, we may also review the capital structure, business plans, management policies, and other characteristics. In certain industries and markets, an acute understanding of laws and regulation are necessary to properly analyze the business.
AEG uses a well-documented methodology, which incorporates all the required elements of a business valuation. This avoids the errors that often result from overreliance on accounting statements, pre-packaged software, or industry rules-of-thumb. AEG valuation opinions also reference the standards that we follow in our analyses.
The expertise of Anderson Economic Group consultants is demonstrated in actual market transactions, timely advice to successful clients, successful resolution of disputes, and in published works.
Valuation
- Business Valuation
Business valuation and appraisal services for clients with a range of needs, including: due diligence and independent view of value, share valuation, valuation for tax authorities, fairness opinions, ESOP formations and annual valuations, family-owned business valuations, and succession planning.
- Intangible Asset and Intellectual Property Valuation
Determining the value of an intangible asset, such as intellectual property or franchise rights, requires expertise not only in finance, but also in industry analysis, economics, and competitive strategy. Intellectual property valued in this manner include patents, copyrights, and trademarks, early-stage and newly developed products, and other intangible assets. Where necessary for use in forensic settings, AEG analyses refer to specific factors identified by courts in seminal patent infringement cases such as Panduit and Georgia Pacific.
- Valuation of Intangibles; Valuation for Estate and Gift Tax Purposes; ESOP Valuations
Where tax authorities require a truly independent, expert valuation opinion, AEG can provide a level of expertise and credibility that can save valuable time and money. Because AEG does not provide accounting or auditing services, and specializes in valuation, its opinions are truly independent and are based on sound valuation methodology.
Commercial Damages
- Commercial Damages Estimates; Economic Damages; Lost Profits
AEG specializes in the estimation of commercial damages due to a variety of causes. Depending on the facts of the case, the appropriate measure of may be lost profits, diminished value, or some other measure. AEG uses the same methodology in its expert reports on commercial damages as it does in engagements not involving litigation. These methods include analysis of financial and operational records; industry and competitive analysis; discounted cash flow models; and sophisticated techniques such as real options or simulation modeling. AEG expert opinions have proven highly credible in courtroom and other forensic settings. They are based on clearly-described methodology, identified data sources, and adherence to recognized professional standards.
- Breach of contract
Economic damages may result from breaches in contracts, such as franchise agreements, distribution agreements, agreements not to compete, investment contracts, and other contracts. AEG experts estimate damages in these cases using methods that take into account the specific industry, economic, and market factors that fundamentally affect business value. Most cases involve analysis of financial statements of the affected company, although financial statement analysis is rarely sufficient to properly establish damages.
- Breach of Territorial Rights; Breach of Franchise Agreement
Franchisees and franchisors, and other companies that contract with each other to conduct business in a primary market area, can sustain damages if these contractual rights are not respected. AEG estimates damages in such cases using methods that recognize the unique nature of franchises and other agreements. AEG uses sophisticated Geographical Information Systems to quantify the lost sales revenue from customers residing in specific market areas. This type of analysis is essential in cases involving franchises in industries such as alcoholic beverage distribution, automobile dealerships, rental car agencies, and hospitality industry establishments such as hotels and restaurants.
Antitrust Economics
- Price-fixing; Resale Price Maintenance;
AEG experts can analyze markets in which price-fixing is alleged, using sophisticated techniques to estimate damages that may occur to consumers and other producers. With occasional shifts in the antitrust legal landscape, including the recent overturning of the near-century-old Supreme Court doctrine on resale price maintenance, it is essential to incorporate both knowledge of antitrust case law and ability to analyze economic markets.
- Price discrimination; Price gauging
Evidence of illegal price discrimination is often buried in data on prices and market trends. AEG uses sophisticated economic and statistical software to analyze such data and show, where possible, the existence or non-existence of such activity. The proper use of such techniques is always dependent on understanding the economics of the particular industry and market.
- Market Definitions; Market Concentration.
One of the first steps in an antitrust analysis is the identification of the market, product category, and competitors. This may require the use of antitrust-specific analyses. Such analyses include the “hypothetical monopolist SSNIP test,” and indicators of concentration in the market such as the Herfindahl-Hirschman Index (HHI), both of which are explicitly listed in the DOJ-FTC Merger Guidelines (1997).
- Sherman Act; State Antitrust Law; State Action Doctrine
Many aspects of the federal Sherman Act have been incorporated into state antitrust laws, including those modeled after the Model Antitrust Reform Act. Guidelines adopted by the National Association of Attorneys General adopt some, but not all, of the elements of the federal policy. AEG has expertise in both state and federal antitrust economics, and experience in specific analyses that are consistent with the laws or policies adopted by specific states. AEG also has experience in properly reviewing claims under the State Action doctrine.
Mergers & Acquisitions Advisory
- Buy-Sell Advice
Our financial experts are available to assist organizations on either the buy or the sell side of a transaction. We use the same rigorous analytics and economic assessments as in other valuation assignments, and adapt our advice to the unique situation of our clients.
- Fairness Opinions
Where a truly independent fairness opinion is requested by the management of a firm, AEG can provide the necessary analytical expertise to properly estimate value. Because AEG does not perform auditing or other accounting services, its opinions do not violate the proscriptions on unlawful use of auditor services contained in Title II of the Sarbanes-Oxley Act of 2002. Furthermore, using an expert valuation consultant does not compromise the integrity of the management advice.
- Strategic Acquisition Advice; Target Market Identification
Understanding both the competitive position of the company, and the economics of the industry, is essential to finding the right target market or strategic acquisition. In markets or industries where AEG has substantial expertise, our advice can be extremely valuable to firm seeking strategic expansion.
Clients that have benefited from our finance and business valuation services include publicly-traded companies in the United States and Europe; small and large privately-held firms; state and local governments; nonprofits including trade associations, charitable institutions, and universities; and many more. Our finance and business valuation experts are also active members of The Institute of Business Appraisers (IBA), National Association for Business Economics (NABE), and the National Association of Forensic Economics (NAFE).
Our work has included markets in more than half of the states in the USA, as well as Canada, Mexico, China, and the Caribbean.
For more information on retaining Anderson Economic Group, please see the engaging our services page.
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