The special committee for a publicly-traded online travel company engaged Stout in the early stages of a proposed acquisition of a previously divested foreign business unit of the company. The seller was an investment company backed by the travel company’s majority shareholder. Because the transaction was with a related-party and the majority shareholder of the company, the special committee wanted an independent opinion on the fairness of the transaction in an effort to protect the company from any undue influence from its majority shareholder.
Serving as the independent advisor for the proposed acquisition, Stout performed an independent valuation of the foreign company that was used as the basis of negotiations. Stout issued a fairness opinion regarding the total consideration to be paid by the company to the related-party.
Stout's opinion helped the special committee exercise its fiduciary duties related to the transaction which were heightened by the related-party nature of the transaction. The valuation analysis was performed using a discounted cash flow method, and a guideline public company method formed the basis of the valuation analysis and the fairness opinion issued to the special committee.