(originally presented at the January 17, 2020 Montreal Workshop)
Complex capital structures are becoming more and more prevalent in the private sector, and thus, it is imperative to know this component of valuation to stay ahead of the curve. The following is a synopsis of the topics that will be addressed:
- Simple vs Complex Structure at a Glance
- Typical Preferred features
- Four methods of Allocation:
- Current Value Method (CVM)
- Scenario Based Methods
- Simplified Scenario (fully-diluted)
- Relative Value
- Full Scenario – Probability Weighted Expected Return Method (PWERM)
- Pros/Cons
- Option Pricing Model (OPM)
- Call options on Equity and Enterprise Value
- Payoff/Breakpoints
- Pros/Cons
- Hybrid Method
- Debt Securities
- Selecting a Method
- Market Rules of Thumb
Presenters: Gregg Hamilton-Piercy, CFA, ASA & Tom Hamilton-Piercy, CFA – MFA Global, Montreal
Join Eleanor Joy, FCBV, a Member of the Membership and Standards Recognition Board of the International Valuation Standard Council, as she takes participants through an overview of International Valuation Standards (IVS). She will start with a brief introduction of the International Valuation Standards Council (IVSC), including what the IVSC is, what the IVSC does and the various IVSC boards that exist. Eleanor will provide an overview of IVS and how CBV Standards compare to IVS. She will also discuss the potential implications of IVS adoption by the CBV Institute.
Join Caroline Philon, Associate Vice-President, Pharmacies Group, National Bank of Canada, as she discusses:
- Portrait of the Quebec industry
- Most significant mergers and acquisitions : chains dominate
- Pharmacy under increasing pressure
- The standard, specialized and digital pharmacy
- Banker’s expectations and transactions criteria
- Risk and mitigation factors of a transaction
- The future of the industry
CBV Institute, in conjunction with the Toronto Young Professionals in Valuation committee, is proud to host its first “Women in Valuation” luncheon.
Join Mary Jane Andrews, FCBV (CBV Institute President & CEO), Susan Glass, FCBV, Nora Murrant, FCBV and Helen Mallovy Hicks, FCBV as they share their experiences and impart valuable wisdom. This is a unique opportunity to hear from these extraordinary CBV women leaders who have dedicated their careers to advancing the valuation profession.
This luncheon will also provide attendees with an opportunity to network with their peers. Registration is limited to 40 attendees. Register now to secure your spot!
Join Helmut Pastrick, Chief Economist for Central 1 Credit Union, as he provides attendees with his annual BC economic review of 2019 and outlook for 2020.
The Calgary Workshop Committee invites you to join us for a highly anticipated social and networking event on Wednesday December 11, 2019. Please join them to connect or reconnect with fellow valuators, celebrate the students success and enjoy the merriment of the upcoming holiday season.
Registration is limited to 40. Register now to secure your spot. The cost includes hors d’oeuvres and one non-alcoholic beverage.
originally offered at the November 7, 2019 Toronto Workshop
Franchising is one of the most common forms of business in Canada. There are currently 75,000 franchised businesses operating in a variety of sectors, and the Canadian Franchise Association lists franchises in over 40 different industries.
In this webinar, Ephraim Stulberg, CPA, CA, CBV, CFF (partner, Matson, Driscoll and Damico) will discuss some of the aspects that make quantifying damages or business value involving either franchisors or franchisees unique. Some of these factors are a function of specific statutes that exist in many provinces; others are driven by the content of the franchise agreement.
The presentation will begin with a brief overview of the franchising business model: what is a franchise, and what are some of the common characteristics of franchise agreements and the franchisor-franchisee relationship that make this model different from other forms of business. It will go on to cover the following topics:
- Statutory Rescission Claims under provincial franchise disclosure legislation
- Business Interruption Damages
- Franchise Agreement Disputes
- Shareholder Disputes
- Expropriation
The Montreal Workshop Committee invites you to join us for a much-awaited social and networking event on Wednesday December 11, 2019. Please join us to enjoy connecting or reconnecting with fellow valuators and to celebrate the students success.
Complex capital structures are becoming more and more prevalent in the private sector, and thus, it is imperative to know this component of valuation to stay ahead of the curve. The following is a synopsis of the topics that will be addressed:
- Users of complex capital structures
- Preferred vs. common vs. debt valuation nuances
- Typical Preferred features
- Four methods of Allocation:
- Probability Weighted Expected Return Method (PWERM)
- Simplified Scenario (fully-diluted)
- Relative Value
- Full Scenario
- Pros/Cons
- Option Pricing Model (OPM)
- Equity vs. Enterprise inputs
- Pros/Cons
- Current Value Method (CVM)
- Hybrid Method (PWERM/OPM)
- How to select the right method?
- Going concern
- Rank of security
- Cost/Benefit of the approach – is it practical for the client?
- Market Benchmarks
- Additional considerations
- Why was the structure chosen?
- Warrants
- Series Volatility
- Discounts
- Mark downs
- Company/Industry specific components
Presenters: Gregg Hamilton-Piercy, CFA, ASA & Tom Hamilton-Piercy, CFA – MFA Global, Montreal
Registration is limited to 60 attendees
Join Jozef Hubburmin, CFO of the Fresh Direct Produce Group of Companies as he provides a compelling presentation on driving value from the company’s perspective. Fresh Direct Produce has generated over 300% sales growth in the past decade along with stellar growth in profits. Jozef will demonstrate how growth in a mature food industry sector comes not from luck but from a continuous cycle of planning and execution by team fueled by the right cultural tendencies.
Effective June 13, 2019, the federal government introduced new “beneficial ownership” tracking requirements for private corporations that are federally incorporated in Canada. Join Ron Martindale CPA, CA, LPA, CBV, CFF and Kristina Shaw BA, LLB as they discuss:
- Why these requirements have been put in place;
- What is currently required of your clients;
- Best practices to assist your clients in this tracking;
- Where these requirements may lead in the future; and
- Opportunities for valuation engagements and related support.
Ron Martindale is a Partner in Davis Martindale LLP’s Valuation & Litigation Support Group. Kristina Shaw is a Corporate Lawyer and Partner at Miller Thomson LLP.
Join CBV Institute and Family Dispute Resolution Institute of Ontario (FDRIO) for a joint seminar on hot topics in family law. Three expert panels consisting of CBVs, a Judge and lawyers will provide attendees with key insights on independence of experts, practice issues and joint retainers.
Independence of experts: Fact vs Appearance
The panel will explore the importance of independence in fact and in appearance from a practical perspective. The panel will discuss:
• Review of criticisms of CBVs’ perceived lack of independence from various pertinent cases
• Judicial criticism of the discrepancies in conclusions between two CBVs. Does it automatically mean lack of independence? Could there be legitimate reasons for discrepancies in conclusions?
• Can instructions received from counsel impact on the independence of the CBV? What should the CBV do?
• Do judges, or legal counsel not sufficiently understand the role of the CBV and, if so, why there are discrepancies?
• What is needed to remedy this issue of perceived independence? What can CBVs do “better”?
Practice Issues
The panel will explore important and potentially controversial practice issues such as:
• Draft schedules for use that do not comply with CBV Institute reporting standards
• Calculation vs. estimate vs. comprehensive valuation reports
• How far can or should CBVs go in their opinions?
o What’s the “fence” around a CBV’s expertise?
o What is the appropriate role of the valuator?
o When is the line crossed?
o When are CBV’s opining on “the law” vs. following “the law”?
o When is it appropriate for a CBV to select/favour a specific legal approach?
o How does a CBV stay in their “expertise” lane?
• How can CBVs make their expert testimony as solid and useful as possible?
• New family law rules in Ontario regarding expert reports
Joint Retainers
The panel will discuss:
• How CBVs deal with conflicting instructions
• How to keep the peace between two sets of clients
• Joint retainers are a requirement in BC – what have the issues been; what’s working; pros and cons?
• Are other provinces going to adopt this practice?
More information
Join CBV Institute and Family Dispute Resolution Institute of Ontario (FDRIO) for a joint seminar on hot topics in family law. Three expert panels consisting of CBVs, a Judge and lawyers will provide attendees with key insights on independence of experts, practice issues and joint retainers. Registration for the in-person session is limited to 70. Register now to secure your spot!
Independence of experts: Fact vs Appearance
The panel will explore the importance of independence in fact and in appearance from a practical perspective. The panel will discuss:
• Review of criticisms of CBVs’ perceived lack of independence from various pertinent cases
• Judicial criticism of the discrepancies in conclusions between two CBVs. Does it automatically mean lack of independence? Could there be legitimate reasons for discrepancies in conclusions?
• Can instructions received from counsel impact on the independence of the CBV? What should the CBV do?
• Do judges, or legal counsel not sufficiently understand the role of the CBV and, if so, why there are discrepancies?
• What is needed to remedy this issue of perceived independence? What can CBVs do “better”?
Practice Issues
The panel will explore important and potentially controversial practice issues such as:
• Draft schedules for use that do not comply with CBV Institute reporting standards
• Calculation vs. estimate vs. comprehensive valuation reports
• How far can or should CBVs go in their opinions?
o What’s the “fence” around a CBV’s expertise?
o What is the appropriate role of the valuator?
o When is the line crossed?
o When are CBV’s opining on “the law” vs. following “the law”?
o When is it appropriate for a CBV to select/favour a specific legal approach?
o How does a CBV stay in their “expertise” lane?
• How can CBVs make their expert testimony as solid and useful as possible?
• New family law rules in Ontario regarding expert reports
Joint Retainers
The panel will discuss:
• How CBVs deal with conflicting instructions
• How to keep the peace between two sets of clients
• Joint retainers are a requirement in BC – what have the issues been; what’s working; pros and cons?
• Are other provinces going to adopt this practice?
More information
CBV Institute is proud to offer the first collaborative networking event between the Young Lawyers – Lower Mainland Section and the Young Professionals in Valuation. We are teaming up to bring you a unique networking opportunity to forge professional relationships with other industry exerts. Brewmasters will also be on hand to share the Steamworks story.
Blockchains and cryptographically backed digital assets can pop up in any engagement, whether we’re ready or not. Join Joshua McDougall as he walks you through some basics about the technology; how to recognize when these digital assets (such as Bitcoin and Ethereum) are present in a business; how proper collection and review processes can reduce the risks that these new technologies expose us to; and how to ensure all relevant information is uncovered and understood.
Joshua McDougall is an Associate Managing Director with Kroll’s Cyber Risk and Investigations practice based in Denver, CO. He specializes in blockchain technology, investigations involving complex data systems, and the eDiscovery lifecycle. Joshua also serves on the Board of Directors of the CryptoCurrency Certification Consortium (C4), a non-profit educator and standards body, and is a co-author of their CryptoCurrency Security Standard (CCSS), the industry standard for securing digital blockchain assets.
The discerning valuation analysis is a model the contains and reconciles the following three discounted cash flow models: (a) The Free Cash Flow to Firm model (FCFF); (b) The Free Cash Flow to Equity model (FCFE); and (c) The Discounted Economic Profits (DEP) or Economic Value-Added model (EVA). The DEP / EVA model is increasingly being utilized by many private equity, investment banking, and corporate finance firms in the USA as well as international industry “consolidators”. The discerning valuation analysis model incorporates into one model the DEP / EVA model (corporate finance framework) with the traditional FCFE and FCFF models typically utilized by CBVs.
The model / analysis allows important insights and transparency via the inter-play of the following variable factors for CBVs working on fairness opinions or in the above noted firms. An analysis / comparison of ROIC and WACC and the impact on value creation (the investment decision for acquiring a business);
- Economic profits and the impact on economic value;
- Sales growth over the projected life cycle of the business;
- Operating capital employed;
- EBITDA margins;
- Net reinvestment rates;
- The impact of leverage and corporate income taxes associated with Economic Value Added; and,
- Operating ROIC.
- The reconciliation of intrinsic value via the three discounted cash flow models.
Join Stephen Kertzman, LLB, CBV, for this advanced webinar offered to CBVs who are looking to gain further insight regarding the above-noted factors to produce more credible and defensible valuation reports. A excel version of the model will be supplied to participants.
Join CBV Institute President & CEO, Mary Jane Andrews; Director of Professional Practice, Catalina Miranda; and Regional Director, Brian Gibson for an intimate practice roundtable and update on Institute initiatives. They are very interested in hearing your views and feedback on activities and progress in the profession.
Lunch will be provided. There is no cost to register but only those who have registered for the event will be admitted. Registration is limited to 50 attendees.
Join Peter Hiddema, Founder and Principal of Common Outlook Consulting Inc., for this customized webinar, as he offers key strategies from the Harvard Negotiation Project to help CBVs negotiate better outcomes in all types of negotiations, while simultaneously building sustainable relationships. Specifically, the session will identify key mistakes we make in negotiations and offer practical strategies for overcoming them.
This networking event, hosted by the Young Professionals in Valuation, is a great opportunity to get to know your industry peers and grow your professional network in Edmonton! Appetizers and drinks will be provided. Register now to secure your spot at this must attend event as space is limited to the first 25 registrants.
This event, hosted by the Young Professionals in Valuation, is a great opportunity to get to know your industry peers and grow your professional network in Calgary! Appetizers and drinks will be provided. Register now to secure your spot at this must attend event as space is limited to the first 60 registrants.
Please join us as Ozge Uncu, Senior Manager, KPMG Vancouver, explains what analytics, big data and artificial intelligence is and how analytics capabilities might evolve in complexity and impact moving forward. Additionally, some concrete examples will be provided with respect to the impact analytics has on business, including changes in how one might approach assessing the value of a company.
Ownership of a minority interest in private real estate is very common. Structures include real estate funds, partnerships, real estate limited partnerships, joint-ventures and corporations. The fair market value of the minority interest is rarely worth its pro-rata share of en bloc 100% value, regardless of the structure.
Join Stephen Cole, FCPA, FCA, FCBV and Nikola Zivkovic, CBV as they discuss how the discount from en bloc value should reflect the following considerations, among others: the mutual expectations of the parties at the outset of the partnership and those that have evolved over time including what is outlined in any relevant agreements; the disadvantages of the minority interest relative to a control position in the subject real estate; the structure of the investment; the liquidity of the interest; the cash flow associated with the interest; the nature of the underlying real estate investment (for example, a development property versus a stable, cash flow generating property); opportunity cost; and the economic and industry conditions as at the valuation date.
There is extensive literature, academic studies and many Court decisions concerning discounts applicable to minority real estate interests. While these points of reference are helpful, their usefulness may be limited where the commentary is very fact specific and / or the data is not current. Many specific minority interests are unique, with their own set of facts, circumstances and value drivers. In these cases, the typical rules of thumb are only a starting point to arriving at a fair market value reflecting the right discount.
One accurate way to determine the value of a minority interest (and by extension its discount from en bloc value) is to determine the value of discounted cash flows anticipated to the minority shareholder. Similar to the Quantitative Marketability Discount Model advanced by Chris Mercer, the prime drivers of the fair market value of a minority interest in private real estate are:
- The current en bloc value of the underlying real estate;
- The expected growth rate in the underlying real estate;
- The expected holding period;
- The expected cash flow during the holding period; and,
- The required holding period return.
The webinar will discuss the above and hopefully not fall prey to the trap Paul Simon so aptly described in his song entitled ‘So Beautiful or So What’:
“Ain’t it strange the way we’re ignorant
How we seek out bad advice
How we jigger it and figure it
Mistaking value for the price…”
Are you a CBV or CBV student in Southwestern Ontario? If so, come out and enjoy some food and drinks at our networking event in London! This will be a great opportunity to meet other CBV professionals and it will also give you the chance to grow your professional network and create valuable connections.
Registration is limited to 40. Register now to secure your spot.
CBV Institute’s Young Professionals in Valuation Organizing Committee is excited to announce it will be hosting its first cocktail and networking event for CBVs and Registered Students in the Vancouver area. All ages are welcome to attend. This will be an event you won’t want to miss! Complimentary food and beverages will be provided.
Register now to secure your spot!
CBV Institute’s Young Professionals in Valuation program is excited to announce a networking event in Montreal – 5 à 7: Valuing the Montreal Sunset! This event offers an opportunity for Members and Students alike to get to know their peers and colleagues! Richard Wise FCPA, FCA, FCBV, FASA, FRICS, MCBA (Emeritus), CFF ,C.Arb, will be addressing attendees, and complimentary food and drinks will be provided.
Registration is limited to 40 attendees. Register now to secure your spot.
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