Appraisal and Valuation Considerations in an Acquisition

Understanding value and price is always critical in a business transaction. It is an important consideration for various stakeholders including financing partners, investors, or other key stakeholders. Appraisal and valuations can assist in negotiations and provide support for compliance considerations for banks, underwriters, the IRS, or other regulatory entities.

Valuations and appraisals of business acquisitions are also essential for accurate financial reporting. Purchase accounting rules on business combinations require companies to fully understand and carefully consider transactions. You need to ensure the proper allocation of the company’s purchase price, account for all the variables involved with the acquisition and assign a fair value to the many tangible and intangible assets within the company. This often requires the assistance of both a plant and equipment appraiser to focus on the tangible assets and a business appraiser to focus on the intangible assets.

Businesses must recognize several types of intangible assets separately from goodwill, and most commonly group them in the following categories:

• Marketing-related intangibles: trademarks or domain names
• Customer-related intangibles: customer lists
• Contract-related intangibles: licensing or agreements
• Technology-related intangibles: patents or proprietary knowledge

The allocation of tangible and intangible assets can have a significant impact on short term earnings; therefore it is essential that all assets are correctly identified.

Bioeconomy consulting firms like

LEC Partners

, Inc., have ASA Certified Sr. Appraisers in Machinery & Equipment as well as other specialties, and Certified Business Valuations Experts,  as well as designated subject matter experts in biofuels/renewable fuels, biomaterials, biomass and biomass power, feedstocks, biotechnologies and a variety of specialty services.  The expertise encompasses things like algae biofuels, aviation/biojet fuels, ethanol, cellulosic ethanol, advanced biofuels, biodiesel, renewable diesel, renewable natural gas, renewable and biochemicals, biogas, syngas, biochar, bio coal, biobutanol, pyrolysis oil, producer gas and wood pellets.  It will also encompass an expertise in technologies like agitation systems, anaerobic digestion, bio-oil extraction, bioreactors, carbon capture, carbon storage, , carbonization, catalysis, cellulosic ethanol, cleantech, direct combustion, , enzyme technologies, fermentation, Fischer-Tropsch, gasification, genetic engineering, hydrothermal,  nanotechnology, organosynthesis, power generation, pyrolysis, renewable technology due diligence, synthetic biology, thermochemical conversion, torrefaction, and waste management.