When granting or measuring the impact of equity awards and complex securities, clients routinely turn to us to perform an in-depth valuation analysis. Clients use our services to assist in the planning and design of equity awards as well as for tax and financial reporting compliance. Services include:

• Pre-IPO stock option and common stock valuation
• Pre-award planning
• Valuation of profits interests
• “Waterfall” analysis
• Performance and time vesting awards (e.g., SARs, LTIPs, and RSUs)
• Analysis of repricing and option exchange programs
• Compensation versus consideration in the context of an acquisition

Our analytical and modeling depth and proprietary valuation models are tailored to our clients’ needs, using appropriate underlying modeling techniques like Black-Scholes Option Pricing, Binomial Lattice, and Monte Carlo Simulation.

Our understanding of best practices and the key issues of relevant regulators help our clients maximize the economics of any issuance and avoid audit review. We have an in-depth understanding of relevant standards and guidance, including IRC 409A, FASB ASC Topic 718, IFRS 2, and the AICPA Practice Aid.

Dedicated industry groups within our organization apply sector-specific expertise to our underlying enterprise valuation analyses. As a result, we take a “real-world” approach, with an effective mechanism for reconciling a theoretically determined fair value to an expected market price. We have been assisting clients with share-based compensation valuations for more than 50 years.

When preparing for, or after closing, an acquisition, clients turn to us to determine the fair value of assets and liabilities for tax and financial reporting purposes. We work closely with our tax and technical accounting experts, who are able to provide clients with the necessary journal entries to bridge the closing and opening balance sheets. As global tax and accounting standards for acquisitions continue to evolve, our understanding of these changes and guidance on best practices instill confidence. With our transaction mindset and investment banking culture, WG Securities understands the industry specifics and has both a domestic and international presence.

Rules regarding business combination accounting require annual and trigger-based testing for goodwill and intangible assets acquired in acquisitions. As a leader in valuation services for financial reporting purposes, we help our clients manage the ongoing issues resulting from acquisitions. When these situations become more complex, we bring in our technical accounting experts to ensure seamless reporting.

• Allocation of purchase price to goodwill (as part of the original accounting for the business combination)
• Allocation of existing goodwill and intangibles across reporting units
• Annual impairment testing of goodwill
• Re-lifing and impairment testing for other intangible assets
• Restructuring of reporting units and operating units

WG Securities’s Complex Securities team specializes in the financial modeling and quantitative skills necessary to assist clients in understanding, structuring, and valuing complex financial instruments for financial reporting, tax compliance, transaction support, or management planning purposes. Our team of specialists understands the requirements and expectations of investors, auditors, and regulators across a wide range of valuation products, including:

• Contingent Considerations
• Convertible Securities
• Embedded Derivatives
• Equity Compensation
• Complex Capital Structures
• Preferred Equity Instruments
• SPAC-Related Instruments
• Prepayable Corporate Debt
• Interest Rate Derivatives
• Current Expected Credit Losses (CECL)
• Tax Receivable Agreements (TRA)
• Tax Blocker Benchmarking
• Hybrid Securities
• Guarantees
• Put and Call Features
• Hedge Effectiveness
• Lifetime Value (LTV)

Our team of strategic financial modeling specialists leverage their expertise in corporate finance, advanced modeling techniques, and business acumen to offer guidance and assistance to our clients across various stages of the transaction lifecycle. At Houlihan Lokey, our dedicated professionals create and evaluate bespoke financial models that are robust, transparent, flexible, and dynamic. These models empower our clients to navigate critical business decisions with confidence.

Whether your objectives involve accessing capital markets, navigating business acquisitions or divestitures, streamlining operations, or assessing overall business performance through a comprehensive financial model, our team is here to provide the expertise and support you need.

Our comprehensive range of services includes:

• Financial Planning and Analysis
  • Budgeting and Forecasting
  • Long-Term Planning
  • 13-Week Cash Flow Forecasting
• Pre-Transaction Consulting
  • M&A Modeling/LBO Modeling/JV Modeling
  • Accretion/Dilution Analysis
  • Scenario Analysis
• Model Diligence
  • Driver Sensitivity Analysis
  • Analytical Review

We serve as a trusted valuation advisor for the implementation of tax planning strategies. We leverage quantitative approaches to help clients address key tax considerations, make informed decisions, and, with the assistance of our internal tax specialists, analyze optimal tax structures throughout the transaction lifecycle. Among other tax valuations, we have provided our clients with the following tax valuation services:

• Value of assets for purchase price allocation, including inventory, real estate, machinery and equipment, intangible assets, and goodwill
• Value of shareholders’ equity to support NOL usage post change of control transactions
• Tax Receivable Agreements (TRA)
• Foreign Investment in Real Property Tax Act (FIRPTA)
• Value of deferred compensation such as stocks and options
• Value of assets for purposes of allocating corporate interest expense across international jurisdictions
• Value of subsidiaries to support worthless stock deductions
• Value of patents for donation to charitable organizations
• Value of partnership assets to support stepped-up basis regarding the transfer of partnership interest
• Value of assets to support like-kind exchange transactions
• Value of assets to support S corporation built-in gains
• Value of assets and entities for a variety of state tax purposes

We assist companies with the valuation and accounting analyses necessary to successfully emerge from bankruptcy. This might include the determination of the reorganization value itself as well as the restatement of the company’s assets and liabilities to fair value, in accordance with ASC 852. We can assist with the necessary accounting guidance as well as the valuation advice.

Navigating the bankruptcy process can be complicated, particularly at a time when the entity is undergoing a major transition, so guidance with the preparation of a plan and assistance with strategic execution may be critical to the success of financial and tax reporting.

Whether the assets reside in the Americas, Europe, Middle East, or Asia-Pacific region, Houlihan Lokey’s Real Estate Valuation and Advisory and Capital Equipment valuation teams provide a diverse range of clients with relevant asset valuation and consulting services. With comprehensive backgrounds in appraisal, diligence, and consulting, our professionals are a resource to clients, offering analytical insights and expertise to meet their needs. We are specialized and experienced in tangible asset valuation in many industries, with experience ranging from retail to complex manufacturing facilities to oil and gas production and oilfield service assets. The Houlihan Lokey professionals who specialize in real estate and capital equipment valuation are experts in their field, holding state certifications and senior credentials, including designations from the Appraisal Institute (MAI), American Society of Appraisers, Royal Institute of Chartered Surveyors (MRICS), and the Institute for Professionals in Taxation (IPT).

Our professionals have completed valuation and advisory services for an array of purposes. Below, we highlight the areas where we can be most helpful in meeting reporting guidelines, diligence, and value-add assignments:

• Purchase Price Allocation
• Impairment Testing
• Fresh-Start Accounting
• Property Tax Appeals, Compliance, Dispute
• Foreign Investment in Real Property Tax Act (FIRPTA)
• Property Insurance Placement
• Loan Collateral
• Liquidation Analyses
• Dispute and Litigation Support

We are a unique valuation-based practice within an investment bank, working to create value for our clients. Our range of capabilities and knowledge in valuing technology-based and IP-rich businesses and their assets position us to help maximize business goals by providing insightful and defensible advice for transactions, financial reporting, tax planning, and disputes as well as other strategic endeavors. We offer the following capabilities:

1. Considerable Experience in Performing Valuation Analyses: Our valuation specialists and bankers have decades of experience and expertise in valuing technology-based and IP-rich businesses as well as their underlying assets, with a breadth and depth of knowledge of the characteristics and risks related to the technology and IP.
2. Significant Industry Expertise: In addition to our professionals’ hands-on valuation experience in numerous technology-based and IP-rich industries, our access to the firm’s dedicated investment banking industry groups provides an unmatched level of industry and sector expertise and transaction experience.
3. Tailored Solutions: We understand that every business is unique, which is why we offer customized solutions to address your specific needs and objectives.
4. Results-Driven: Our objective is to deliver results that drive growth, innovation, and long-term value creation for your organization.

Our value proposition allows us to provide valuation, diligence, and financial opinion advisory services from a coordinated team of transaction and valuation specialists with real-world solutions and expertise tailored to the needs of a given situation.

Most assets can generally be valued using the income, market, and cost approaches. Although each approach is considered, the valuation approach ultimately selected is based on the characteristics of the asset and the availability of information. We specialize in comprehensive IP valuation services tailored to meet your specific needs. Our proven methodology combines rigorous analysis with industry expertise to provide you with accurate and actionable insights.