Fairness opinions

In Strategy and Transactions

EY teams provide fairness opinions to boards of directors, special committees and other fiduciaries in connection with mergers, acquisitions, divestitures and other material transactions. By analyzing the financial aspects of a transaction, we help our clients fulfill their fiduciary duties and make better decisions.

What EY can do for you

EY teams can provide you with an independent opinion as to whether the price to be paid or received in a transaction is fair from a financial point of view. In doing so, EY professionals can help you address the following important questions:

  • Will the transaction create or destroy shareholder value?
  • What is the value of the target assets or equity interests?
  • How does non-cash consideration such as equity, seller notes, earnouts, options and other complex financial instruments affect the transaction value? 
  • How do risks, synergies and other growth opportunities impact the transaction economics?
  • Is the transaction accretive or dilutive?
  • How do the transaction structure, tax attributes and contingencies impact deal value?

How EY professionals are different

  • Insightful, rigorous and independent analysis: An EY fairness opinion provides a thorough analysis of the target, as well as the value of any noncash consideration such as seller notes, equity interests, earnouts and other complex financial instruments.
  • Dedicated fairness opinion team: Knowledgeable professionals who concentrate on fairness opinions, including senior partners and thought leaders who are at the forefront of legal developments and governance trends.
  • Transaction advisors recognized across the globe with dedicated sector professionals: 18,000+ EY transaction professionals, including 3,500+ valuation professionals, around the world combining local market knowledge with sector experience to provide exceptional client service.
  • Broad suite of transaction capabilities: EY professionals can leverage the findings and skill sets of strategy, financial, tax, commercial, cyber, human resources and other diligence teams that are advising on the transaction.

Frequently asked questions

  • What is a fairness opinion?

    • A fairness opinion is a financial advisor’s perspective as to whether the price to be paid or received in a transaction is fair to the client’s shareholders.
    • The opinion is based on rigorous financial analysis, including a comparison of the target’s value to the purchase price, to assess whether the transaction’s economics are fair to the company’s shareholders.
    • Fairness opinions are regularly obtained by boards, special committees and other fiduciaries to gain a comprehensive understanding of the financial aspects of a transaction and to demonstrate they have made their decision with due care.
  • Why get a fairness opinion?

    • Board members have fiduciary duties to act on an informed basis and in the best interest of the company and its shareholders.
    • An independent fairness opinion can help board members fulfill their fiduciary duties by providing them with a comprehensive analysis and unbiased opinion of the financial fairness of a transaction.
    benefits of obtaining fairness opinion
  • When should a fairness opinion be obtained?

    • As stewards of shareholder capital, board members often face decisions that can significantly impact shareholder value. Obtaining an independent fairness opinion is critical for the board of any business with a broad shareholder base. This includes both public and private companies of any size.
    • It is considered best practice to obtain a fairness opinion for any significant transaction that could affect shareholder value, especially if the deal will receive more scrutiny, such as in:
      • Material transactions
      • Related-party transactions
      • Transactions involving noncash consideration such as stock, seller financing, earnouts and options
      • Cross-border transactions
      • Transactions with a target in early development stage or different industry
      • Deals that involve significant synergies
      • Transactions that could impact a not-for-profit status
    • In certain cases, a fairness opinion may be required by debt covenants or regulations.
  • When is a fairness opinion delivered?

    A fairness opinion is delivered prior to the board’s approval of the transaction and signing of the definitive agreement.

    agreement sign up with fairness opinion

Contact us

Like what you’ve seen? Get in touch to learn more.