Business Valuation and Corporate Finance

Tax law requires companies or shares to be valued under various circumstances. These include:

• Companies or shares in a company are gifted or inherited
• An entrepreneur relocates to another country
• A business unit is relocated
• Intra-group restructuring: companies or business units are contributed, merged or spun off

Whatever the circumstances, we prepare economically and legally sound valuations and expert opinions for the tax authorities, on the basis of the valuation provisions for tax purposes. Our long-standing experience with tax audits means we can also routinely support our clients in reaching agreements with the tax authorities on valuation matters.

The voluntary withdrawal or dismissal of shareholders regularly gives rise to significant valuation issues. Statutory or contractual provisions regularly call for valuations under corporate law. Example situations include:

• A shareholder’s position is voluntarily or involuntarily terminated
• A shareholder dies and the heirs reach a settlement
• Minority shareholders are squeezed out
• Listed companies are merged
• A profit and loss transfer agreement is concluded

In these cases, the shareholders or their legal successors are entitled to a settlement. We help our clients to determine an appropriate settlement in line with the applicable requirements. We also work as court-appointed auditors.

We advise shareholders, investors and companies, and we act as independent experts on:

• Impairment tests in connection with non-cash capital increases
• Producing expert opinions on the appropriateness of inter-company agreements
• Determining the value of the parties’ shares in company conversions

As a rule, valuations under family law are made necessary by the equalization of accrued gains. The starting point for this is the German matrimonial property regime. Section 1376 of the German Civil Code regulates how initial and final assets must be calculated, but only in an abstract way. Case law gives rise to additional requirements. The main questions that arise here deal with the proper consideration of owner dependence, the deduction of the deferred income tax burden, and the consideration of severance clauses and purchase prices. Company valuations therefore require not only business expertise but also in-depth tax knowledge.

Valuations for inheritance purposes are often triggered by disputes about the amount of the claim to the compulsory share. In an inheritance dispute within a community of heirs, the enterprise value may also be disputed. Here too, it is important to observe the requirements of case law (including deferred income taxes).

Our team members are familiar with all of the requirements, and offer training to judges in addition to auditors, tax advisors and lawyers. In valuation matters, we act both in the capacity of a party expert and a court expert.

The significance of market and fair values in accounting has increased substantially in recent years. We support our clients with:

• Purchase price allocation in line with national and international principles
• Valuation of intangible assets
• Impairment tests in line with national and international principles

Independent experts are often engaged to assess whether far-reaching business decisions are appropriate. When producing a fairness opinion of this kind, we analyze the financial appropriateness of a purchase price or the outcome of a decision-making process from the shareholder perspective. This includes an appraisal of statements concerning public acquisition and takeover bids issued by executive bodies pursuant to Sec. 27 of the German Securities Acquisition and Takeover Act.

In disputes in and out of court, we assist our clients by reviewing or calculating business values in compliance with contractual agreements and applied valuation methods. In many cases we also draft the relevant contracts to prevent time-consuming and costly confrontations later on. If a dispute cannot be avoided, we can represent clients both in and out of court, and perform a loss assessment.

Our team of around (30) experts offer financial advisory services on all stages of transactions. As well as preparing transactions and indicative offers, we provide comprehensive support during a transaction – right up to the post-closure accounting. We assist our clients not only with buying and selling, but also with reorganizing and restructuring. In addition, we support executive bodies in complying with their own duties of care.

Our financial advisory services include:

• Valuation
• Financial due diligence
• Restructuring and reorganization advice
• Purchase price allocations in line with national and international principles
• Preparing and reviewing financial data for a transaction (e.g. closing accounts)
• Accounting support in respect of transactions

We also advise our clients on business management issues from an entrepreneurial or legal perspective. Our services include:

• Mapping investment decisions and assessing their appropriateness
• Support with modelling projections
• Determining and assessing the infringer’s profit in patent infringement cases
• Designing option programs
• Assessing management decisions in line with the business judgement rule
• Valuing special business models (crypto assets)
• Valuing start-ups