With a reputation built over decades, Duff & Phelps Opinions practice delivers high quality financial advice and fairness opinions that withstand the most rigorous scrutiny. Refinitiv ranks our opinions practice No. 1 for global fairness opinions for 2022.Contact Us
Explore Fairness and Solvency Opinions
Every day boards of directors make decisions that are subject to intense external scrutiny. In pursuing the best interests of shareholders, boards must deliberate on complex corporate transactions, often in sub-optimal circumstances. Conflicted investment bankers with contingent fee arrangements, related-party transactions, and the lack of market-clearing mechanisms in certain deals all complicate the board decision-making process. An independent fairness analysis and opinion help boards of directors assess corporate transactions and fulfill their fiduciary duties.
We are comfortable rendering opinions involving minority interests, debt securities, and limited market checks. In addition to providing fairness opinions on M&A transactions, we are experts in advising and opining on transactions absent a market-clearing mechanism.
Duff & Phelps Opinions is a core practice at Kroll and we are the market leader. We rank #1 for the total number of fairness opinions rendered over the past ten years. Since 2005, we have provided more than 1,252 fairness opinions, reflecting nearly $690 billion in deal value.
In addition to providing fairness opinions on M&A transactions, we are experts in advising and opining on transactions absent a market-clearing mechanism. Representative situations include:
- Sell-side/buy-side mergers & acquisitions
- Spin-offs, split-ups, divestitures
- Going-private transactions
- Related-party transactions
- Down-round financing, minority investments, and other financing transactions
- Requirements pursuant to certain bond indentures and credit agreements
- Any transaction requiring a shareholder vote
- ESOP/ERISA transactions
Frequently Asked Questions
What is a fairness opinion?
- A fairness opinion is a letter delivered to a fiduciary (typically a company’s board of directors) as to whether or not a transaction is fair, from a financial point of view, to the company or a group of the company's security holders
- Does not indicate that highest/lowest or best price has been received/paid, as the case may be; instead a fairness opinion indicates that the price is in a range of fair values, or above or below the range, as the case may be
While not legally required, when are fairness opinions typically requested?
- Virtually any publicly-traded company going private, merging, or engaging in a material or related-party transaction
- Private companies also get fairness opinions for related-party transactions, when there is potential for litigation, or if there is a large and diverse group of shareholders
What are the typical transactions where a fairness opinion may be needed?
- Recapitalizations and restructurings
- Stock repurchase transactions
- Corporate acquisitions and divestitures
- Mergers (sell-side and buy-side)
- Leveraged buyouts
- Going private transactions
- Squeeze outs
- ESOP/ERISA transactions
- High vote shareholders receiving greater consideration
- Insiders receiving different consideration
What is the purpose of a fairness opinion?
- Assists a board of directors in a decision-making process, supporting their duty to act on an informed basis
- Demonstrates the board of directors acted prudently
- Provides a line of defense in the event of post-deal litigation
What is the difference between a fairness opinion and a valuation?
- A fairness opinion will state that the economic terms of a transaction (i.e., price) is fair, from a financial point of view, to a particular stakeholder (i.e., the company or shareholders).
- A valuation will merely determine a valuation range based on certain commonly accepted valuation methodologies, with no conclusion regarding fairness to a particular stakeholder.
- Important to understand is how a valuation analysis is to be utilized by the engaging party.
- Meaning, if the engaging party is utilizing the valuation to support a decision making process in transaction where consideration is being exchanged, it is analogous to a fairness opinion.
- The situation above is very different from a valuation being utilized for tax, accounting or other corporate purposes.
- Most fairness opinions are supported by a fundamental valuation analysis, although in certain circumstances where fundamental valuation may not be applicable, a bespoke comparable transaction analysis may be the only methodology utilized.
When is a fairness opinion typically delivered?
- A fairness opinion is typically issued in conjunction with a board of directors’ (or other fidcuiary’s) approval of the transaction.
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The Opinions Practice of Kroll Rendered a Fairness Opinion to Pathfinder Acquisition Corporation
Dating App Grindr Is Set to Go Public Via a De-SPAC Transaction Valued at $2.1 Billion. Our Opinions Practice Rendered a Fairness Opinion to Tiga Acquisition Corp. in Connection with Its Proposed Merger with Grindr Group, LLC.
Our Opinions Practice Rendered a Fairness Opinion to the Board of Managers of the Bardstown Bourbon Company on Its Sale to Pritzker Private Capital
Our Opinions Practice Provided a Fairness Opinion to LAACO, Ltd., in Connection With Its Sale to CubeSmart for Approximately $1.7 Billion
Our Opinions Practice Provided a Fairness Opinion to Capvis AG in Connection With the Continuation Vehicle Transaction Co-led by Affiliates of Committed Advisors and Eurazeo
has been involved in a Continuation Vehicle Transaction by
Our Opinions Practice Provided Solvency Opinions to the Boards of Directors of L Brands and Victoria's Secret & Co.
has completed the spin-off of