Recommendation for third-party valuation

professional profile

June 26, 2023

by a professional in Nashville, TN, USA

Hi Searchfunder community,

One of my clients is working with a seller that needs to conduct a valuation exercise to determine how to attribute the value of the transaction for an asset deal (ex: hard assets, customer lists, non-compete, corporate goodwill, personal goodwill, etc). Since the seller is a C-corp, the owner would like to see as much of the value attributed to personal goodwill. The business is an HVAC service business located in Texas.

Are there any recommendations of groups that conduct this kind of work?

Thanks in advance!

0
12
100
Replies
12
commentor profile
Reply by a professional
from The College of New Jersey in La Verne, CA 91750, USA
^redacted‌ thanks for the tag!!!

I'm a business valuation expert and agree with ^redacted‌. Your client probably does not need to go this in-depth with the analysis unless he is going through a divorce or has some financial or tax reporting requirement that requires a breakdown of the purchase price to that level. For tax purposes, we rarely see the allocation of value among Class VI and VII assets having much, if any, impact (with the exception of non-compete agreements). Usually, the focus is on inventory, fixed assets, and non-compete agreement value. Happy to chat with you about redacted or###-###-####
commentor profile
Reply by a searcher
in Boston, MA, USA
I don't think you actually need a valuation here. You're looking for an asset appraisal (and even this is probably more than you need....) I've worked with many businesses being sold in the trades and usually allocating assets vs goodwill for tax purposes is whatever is roughly agreed upon by the buyers/sellers. Come up with something thats a bit aggressive but not too wild for the equipment value and the rest gets allocated to personal goodwill of the business owner. (Assuming youre drafting up two purchase agreements to get out of the double taxations on the C-Corp here.)

A business valuation for an HVAC company is going to say your business is worth X, you have Y in assets (because thats what you told me you have for FMV of assets), so goodwill is X-Y.
commentor profile
+10 more replies.
Join the discussion