Client Challenge
A privately held holding company with national operations in wire and cable manufacturing and wholesale distribution through a wholly owned subsidiary engaged FairValue Advisors to determine the fair market value of the company for an internal shareholder transaction and long-term planning. The engagement involved addressing several complexities, including:
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A complex capital structure with voting and non-voting shares.
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A buy-sell agreement with put rights and transfer restrictions.
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Exposure to volatile commodity markets such as copper and aluminum.
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A combination of operating assets and significant investment holdings.
Our Role
We conducted a comprehensive valuation using both income and market approaches. Our analysis included:
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Normalizing financials and projecting future performance.
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Applying discounts for lack of control and marketability.
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Benchmarking against public peers in the electrical components and wholesale distribution sector.
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Interpreting the buy-sell agreement to align with valuation outcomes.
The Result
The valuation provided a reliable per-share value for non-controlling interests, enabling a fair shareholder redemption process. It also supported ongoing planning efforts and met IRS and financial reporting standards.
Impact
The client successfully executed the transaction and gained clarity on future ownership transitions—strengthening governance and protecting long-term value.
