Private Equity

DiFilippo Corporate Finance Group offers independent and objective valuation opinions for financial and tax reporting purposes to private equity, both at the P/E fund and portfolio company level. Clients select DiFilippo Corporate Finance Group as our professionals work closely on a variety of pre-transaction and post transaction issues including:

  • Dealing with the complex technical accounting rules related to fair value, develop valuation models to comply with these standards and prepare opinions to withstand auditor and regulatory review.
  • Provide pre-deal services including assisting P/E deal teams in understanding valuation impact of potential tax attributes of the transaction including usage of net operating losses, stepped-up basis from treating the transaction as an asset deal for tax purposes, and transaction structuring.
  • Prepare earnings per share accretion/dilution modeling considering the impact of additional depreciation, stepped up basis in fixed assets, intangible asset amortization, effective tax rate resulting from deal structure, post transaction equity compensation grants, etc.
  • Provide post transaction services including purchase price allocation of the opening balance sheet and marking valuation of certain assets to fair value, valuing preferred and common stock of the capital structure, account for equity grants to management and other key employees and goodwill/other asset impairment studies.

Specific valuation services provided by DiFilippo Corporate Finance Group professionals related to financial and tax reporting matters are noted below:

Financial Reporting

DiFilippo Corporate Finance Group fair value opinions and consulting services for financial reporting include the following:

  • Business Combinations and Asset Acquisitions
    • Purchase price allocation of acquired assets
    • Valuation of contingent consideration
    • Review of purchase & sale agreement, sale terms and pricing
    • Pre-deal enterprise valuation modeling.
    • Earnings per share accretion/dilution modeling
  • Debt/Equity Classification, Fixed Income, Derivatives & Other Complex Instruments
    • Preferred stock, debt and equity investments classification
    • Bifurcation of value of certain preferred stock and venture debt investments into debt, mezzanine, and equity components as required by accounting standards
    • Fair value of debt
    • Calculate effective interest rate of debt
    • Fair value of loan guarantees
    • Embedded Derivatives (e.g. change of control provisions, conversion features, etc.)
    • Calculate credit risk/non-performance adjustments for swaps and other counterparty transactions
    • Accretion of debt and/or preferred stock to fair value
  • Share Based Payments
    • Stock compensation and restricted stock
    • Market condition based equity grants (e.g. Vesting based on 2x capital return)
    • Profit interest, phantom stock or other grants
  • Impairment
    • Annual studies for goodwill and indefinite lived intangibles
    • Long lived assets
  • Fair Value Measurements (FASB ASC 820, previously SFAS 157)
    • Fair value of debt, preferred equity and common equity
  • Other Advisory Services
    • Fresh start accounting
    • Drafting of fair value disclosures for financial statements
    • Responding to SEC comment letters
    • Consultations with regulators

Tax Reporting 
DiFilippo Corporate Finance Group’s tax reporting valuation opinions include IRC 409A common stock valuations, tax structuring to general corporate planning. Our services have been challenged and successfully defended by the Internal Revenue Service and international taxing authorities. Our tax reporting and consulting services for public companies include:

  • Transaction Based
    • Pre-deal assessment of tax amortization from stepped up basis of fixed assets, section §197 goodwill & intangible assets from asset deal structure or IRC 338h.10 election
    • Valuation impact of NOL 382 limitations, non-complete 280g tax, transfer pricing planning and deal structuring of intellectual property/other assets.
    • Non-compete agreements IRC §280g
    • Legal entity valuations, entity spinouts and asset transfers
    • C-Corp to LLC-Corp Conversions (IRC §1374)
  • Other Tax Advisory
    • Stock Compensation studies for § IRC 409A compliance
    • Estate & gift planning for executives and directors for equity grants
    • Tax accounting
    • Valuations of partnerships & other pass-through entities
    • Worthless stock deductions (IRC §165)