Fairness Opinion on a Cross-Border Agricultural Restructuring

The transaction

A publicly listed agri-business was proposing to transfer its African cultivation subsidiary and European distribution subsidiary to a newly formed entity — in exchange for a majority equity stake. No cash would change hands. Founding management would hold the rest of the equity.

The board had a fiduciary duty to confirm the deal was fair. The problem: the standard approach to fairness opinions assumes cash changes hands. You value what’s being sold, compare it to the price offered, and render an opinion on the gap.

Standard methodology didn’t apply. So we built something that did.

A different framework

The analysis was reframed as a single question: what has to go right for this to be worth it?

The cost side was straightforward. Both subsidiaries had been acquired within the prior eighteen months, making historical acquisition cost ($13M combined) a reliable and defensible baseline for what was being given up. The benefit side required a DCF and comparable company analysis to estimate the upside if management forecasts were achieved.

Then came the real work: a break-even probability framework. If the standalone likelihood of achieving the growth plan was 35%, the transaction became value-neutral for the existing shareholder the moment the new, focused management team improved that probability by 18 percentage points. The analysis assessed whether that delta was plausible — given management’s track record, the strategic rationale for a focused structure, and the conditions precedent in the agreement that provided a partial floor.

The framework turned an unconventional deal structure into a tractable analytical question. Rather than rendering an opinion on a gap that didn’t exist, it gave the board a principled test to apply to their own judgment about the management team.

What the board received

A clear, documented framework for their fiduciary decision — one that directors could explain to shareholders, stand behind in writing, and point to if the decision was ever revisited.