Pendo’s partners have the unique experience of working with and maintaining relationships with financial sponsors and asset managers across the capital markets industry involved in facilitating private equity transactions including:

• private equity funds,
• hedge funds,
• venture funds,
• commercial lenders,
• business development companies (BDCs),
• SBICs,
• family offices, and
• pension funds.

This broad experience ranges from transaction advisory and valuation services, including fairness and solvency opinions and financial and tax reporting valuation services (ASC 820, ASC 805, ASC 350, ASC 718, etc.) to due diligence and financial modeling services.

Pendo’s specific expertise providing financial modeling and valuation services on private equity positions includes:

• Debt (distressed, senior, secured, unsecured, and subordinated)
• Common and preferred equity
• Convertible securities
• Warrants and options
• CDOs and CLOs
• Real estate

Pendo provides fairness opinions related to a variety of transactions including:

• Related Party Transactions
• Exchange Offers
• Recapitalizations & Restructurings
• Spin-offs
• Stock Repurchases
• Corporate Acquisitions & Divestitures
• Mergers
• Leveraged Buyouts
• Going Private
• ESOP / ERISA Transactions

A solvency opinion is often obtained by a company’s board in connection with a special dividend, spinoff, or leveraged transaction. Boards of Directors can be held personally liable in cases of fraudulent transfers or illegal distributions.

A solvency analysis encompasses valuation and cash flow tests that determine if, after giving effect to a proposed transaction:

• the sum of the assets of the company, both at a fair valuation and at present fair salable value, exceeds its liabilities, including contingent, subordinated, unmatured, and unliquidated liabilities;
• the company has sufficient capital with which to conduct business; and
• the company has not incurred debts beyond its ability to pay such debts as they mature.

In situations where a company is making a dividend payment, a solvency opinion also addresses the sufficiency of surplus to effect the distribution.

Delaware Corporation Law and other states’ corporation laws require that dividends be paid out of surplus, which is defined as the excess of the net assets of the corporation over its capital (capital is usually the par value of issued stock).

Pendo’s professionals provide a sophisticated partner with a broad reach to help potential buyers and sellers throughout the process. Pendo also has longstanding relationships with various capital sources including but not limited to commercial banks, business development companies (BDCs), private equity firms, mezzanine funds, SBICs, and family offices.

Our professionals work with business owners to:

• Develop, formulate, and implement M&A and capital raising strategies;
• Identify, screen, and initiate discussions with potential investors, lenders, acquisition targets or buyers;
• Structure and negotiate transaction terms; and
• Arrange financing.

Pendo’s merger & acquisition practice targets clients in the lower middle market with EBITDA performance metrics generally between $1 million and $10 million.