In this May 2012 presentation, Timothy R. Lee, ASA from Mercer Capital, provides some perspective on the size of the business valuation profession and the outlook for the future.
For more information, contact Tim Lee at 901.685.2120 or email him at [email protected].
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Timothy R. Lee, ASATimothy R. Lee, ASA is a senior vice president and board director at Mercer Capital and leads the firm’s corporate valuation group.
Tim’s practice encompasses valuation and financial advisory services for purposes including transactions, employee stock ownership plans, estate and gift tax planning and compliance, management and ownership succession, buy-sell agreement planning and execution, and corporate planning and reorganizations. Additionally, Tim provides consulting expertise in a variety of litigation and controversy matters involving dissenting shareholder rights, marital dissolution, tax matters, corporate litigation, and shareholder conflicts.
Tim is co-author of the book, A Reviewer’s Handbook to Business Valuation with L. Paul Hood, Jr., JD, LLM, published in 2011 by John Wiley & Sons, Inc.
For more information about Tim’s practice and to view his complete CV, visit www.mercercapital.com.
Timothy R. Lee, ASALeader, Corporate Valuation Group
Mercer Capital’s mission is to leverage our expertise in a meaningful work environment by identifying, attracting, and developing extraordinary colleagues and appreciative clients and to provide specialized financial advisory services with integrity and professional excellence
The Market – A Few Numbers≫ U.S. wealth segmentation (anecdotal figures from Occupy WS article)
Wealthiest 1% of the households own 34.6% of private wealth and 42.7% of financial wealth
U.S. has greater wealth concentration than India and China; on par with Mexico and Iran; higher than 94 of the 34 countries measured (CIA)
On one hand, increasing wealth concentration reduces opportunity for valuation volume; on the other, this class of business owner may look more to valuation as a multi-faceted tool
≫ ESOPs
About 11,500 in the U.S.; 7,000 ESOPs considered significant to sponsor
Perhaps 10-20% are externally entrusted
≫ Taxable estates under current laws
About one-tenth the numbers of taxable estates under current law ($5mm) than prior law (9,300v.82,800 estimated filers and 3,900v. 39,800 taxable; Tax Foundation)
The Market – A Few Numbers≫ Credentialed Professionals (ballpark figures, no one really knows!)
• CBA 600 +/-• ASA 1,500 +/-• ABV 3,000 +/-• CVA / AVA 7,000 +/-• CFA 4,000 +/-
• Total active professionals is perhaps 13,000 to 16,000 (say 14,500)
• Non-credentialed practitioners, industry crowd, academia, etc.
• Review appraisers in larger audit firms
• Non-credentialed paraprofessional support
• Using estimates based on 65% utilization, $150/hour rates – Is BV a $3.0 billion profession? (Average billings per professional of $200,000 annually and 20 assignments? Total annual project flow of 350,000 assignments)
Investment Banker Survey Information» In Winter 2011 Pepperdine Private Capital
Markets Project Survey, there were 245 investment banker respondents
» Key findings:
Approximately 38% of respondents indicated that strategic buyers pay between 10-20% more in transactions than financial buyers
Roughly 20% expect to close 3 transactions over next 12 months. Nearly 41% reported transactions took 6 – 9 months to close
Variety of reasons for businesses not transacting. Approximately 19% reported the business being over-priced while nearly 15% indicated a general lack of capital to finance
About Mercer CapitalMercer Capital is a national business valuation and financial advisory firm.
We offer a broad range of services, including corporate valuation, financial institution valuation, financial reporting valuation, gift and estate tax valuation, M&A advisory, fairness opinions, ESOP and ERISA valuation services, and litigation and expert testimony consulting.
We have provided thousands of valuation opinions for corporations of all sizes in a wide variety of industries. Our valuation opinions are well-reasoned and thoroughly documented, providing critical support for any potential engagement.
Our work has been reviewed and accepted by the major agencies of the federal government charged with regulating business transactions, as well as the largest accounting and law firms in the nation in connection with engagements involving their clients.
For over thirty years, Mercer Capital has been bringing uncommon professionalism, intellectual rigor, technical expertise, and superior client service to a broad range of public and private companies and financial institutions located throughout the world. Feel confident in our experience and expertise.
Mercer Capital | 901.685.2120 | www.mercercapital.com
Succession & Shareholder Planning Valuations for Corporate Tax Planning Valuations for Gift & Estate Tax Planning Fairness Opinions ESOP & ERISA Advisory Services Litigation Related Expert Witness Opinions Bankruptcy Related Valuation Services Valuations for Buy-Sell Agreements
» Transaction Advisory Services M&A and investment banking services Fairness Opinions Buy-sell agreements & private company
transactions Strategic Assessments
» Litigation Support Services Statutory Fair Value Business Damages & Lost Profits Valuation, Labor & Contract Disputes Family Law & Divorce Tax Related Controversies Corporate Restructuring & Dissolution Initial Consultation & Analysis Testimony & Trial Support
Omissions & CommissionsErrors, Challenges & Solutions in Business Appraisal Reports
The only tangible result of the valuation process, appraisal reports are frequently subject to scrutiny and attack, not all of which are accurately substantiated.
In this webinar BVR welcomes attorney Paul Hood and appraiser Tim Lee, co-authors of "A Reviewer's Handbook to Business Valuation," for a look at these controversial issues and how appraisers can best prepare themselves and their reports.
Through a consideration of both questionable omissions and inclusions, Hood and Lee will reveal what courts – and appellate courts – have said about appraisal reports and the both questionable and common errors they contain.
Don’t miss this informative
webinar!
Sponsored by BV Resources
Date: Thursday, August 9, 2012Time: Noon – 1:15pm (Central)
Qualifies for 1.5 CPE credits
REGISTER HERE PresentersTimothy R. Lee, ASALeader, Corporate Valuation GroupMERCER [email protected]
L. Paul Hood, Jr., JD, LLMConsultant, Speaker, Author504.452.7574 (c)[email protected]’s LinkedIn Profile
A Reviewer’s Handbook to Business ValuationPractical Guidance to the Use and Abuse of Business Appraisal Reports
Focused on the practical aspects of business valuation that arise in the context of a tax valuation, this book provides a detailed analysis of the business valuation process. Discussion is included of various cases outlining errors that appraisers have made in appraisal reports, as well as in-depth examination of current appraisal industry issues that impact tax valuations.
For more information and to order, visit:
www.BVReviewersHandbook.com
Get your copy of …
By L. Paul Hood, Jr., JD, LLM & Timothy R. Lee, ASA