Our team of valuation experts can assist you with getting a view on fair market value of a company, a business or assets in the context of an intra group restructuring. We can also assist you in determining the fair value of shares in the context of employee stock option plans and in valuing the financial instruments in relation to management incentive plans.
Group structures can become involuntary more and more complex through acquisitions, mergers, joint ventures and carve outs. Consequently, this complex legal structure no longer supports the way the business is managed and can leave you with a large number of redundant / dormant companies which require time and effort to maintain, for little benefit.
This is where our team can help you simplify things by performing a valuation of the legal entity or entities affected by an intra-group restructuring to help ensure that such transactions take place at arm’s length.
These type of transactions involve intangible assets such as intellectual property, including brand names, certain licenses, patents related to specific technologies, customer relationships or others in the context of changes made to a company’s structure or organization.
In Belgium, a contribution in kind transaction will need to be assessed by the company’s auditor, whose conclusions are summarized in a report.
Stock options are taxable at the grant date on a lump sum basis. In principle, any gains resulting from the exercise of the options and/or from the sale of the underlying shares at a later point in time, remain tax-free.
The taxable amount is equal to a certain percentage (between 9% and 18% depending on the conditions) of the fair market value of the underlying shares.
Companies generally have a choice of what option pricing model they prefer to use in valuing stock awards. The fair value of an ESOP is generally estimated using an option-pricing model like the Black-Scholes or a binomial model. We can assist in determining the fair market value of the shares.
In many private equity led management buyouts, management is incentivized through a management incentive structure (or ratchet structure). This type of compensation is meant to align private equiteers with their capital providers, as it is the major source of their compensation. This management incentive can take the form of sweet equity, preferred equity, warrant plans, options or carried interest (“carry”).
Our team has relevant experience in valuing this (often complex) type of financial instrument using tailored valuation approaches, such as Black & Scholes, binomial models, probability-weighted expected returns (“PWERM”), etc. In this type of valuations we often work closely together with the KPMG Tax & Legal team.