The Ontario Chapter of Family Firm Institute will be holding a Best Practices Breakfast, “Harness the Power of Social Media: Without Wasting Your Time or Losing Your Identity” on June 6, 2012. Randall Craig will explain how to effectively use social media to develop a network for both professional and corporate growth. Randall Craig is the author of six books including Social Media for Business and Online PR and Social Media. He has appeared on numerous TV and radio shows, and has been profiled in all national media.
When
Wednesday, June 6, 2012
From 7:30 am to 9:30 am
Where
Marsh Canada Limited
161 Bay Street
14th Floor
Toronto, ON M5J 2S1
Fees
FFI Members, Friends of ONC and Guests: $30
Click here for more information and to register for the event.
Seating is limited, register as soon as possible!
Bruce Roher, CA • IFA, CBV, CFE
President
Fuller Landau Valuations Inc.
151 Bloor Street West 12th Floor
Toronto Ontario M5S 1S4
broher@fullerlandau.com
416.645.6526 Direct
416.645.6500 General
416.645.6501 Fax
The Ontario Chapter of Family Firm Institute will be holding an event, “A Vintner’s Tale: From cellar hand to a wine producing power house” on March 21, 2012. Join Andrew von Teichman, co-founder (with Allan Jackson of Jackson Triggs) of Union Wines for a first-hand account of the personal and business journey that led to the creation of Union Wines, one of the top-selling vintages across the LCBO.
Andrew will also describe his family’s background in the wine industry, the issues and lessons learned surrounding the sale of their ownership position in Pelee Island Winery to their business partner, and the renewal of their innovation and equity participation in the Canadian wine business with Von Terra Enterprises, a licensed agent representing local and imported producers of premium wines.
When
Wednesday, March 21, 2012
From 5:30 pm to 7:30 pm
Where
Marsh Canada Limited
161 Bay Street
14th Floor
Toronto, ON M5J 2S1
Fees
FFI Members and Friends of ONC: Free
Guests and Non-Members: $75
To register click here.
I read an interesting article in Seeking Alpha[1] that provides a rule of thumb for stock valuation. First, add the expected growth rate of a stock’s earnings to its dividend yield. Then divide the result by the price earnings ratio.
The higher the ratio, the more undervalued the stock. Money manager, Peter Lynch, recommended that stocks should be purchased with a ratio of 2 or higher and avoided with a ratio of less than 1.
The article analyzed Apple when it was trading at $551.15 on March 12, 2012. The annual growth rate was expected to be 17.3% over the next 5 years and Apple does not currently pay a dividend. The price to earnings ratio is 11.5. Dividing 17.3 by 11.5 results in a rule of thumb ratio of 1.5.
In order to assess how much Apple is undervalued, it is necessary to calculate its value using a discounted earnings method. Using this method, Apple has a value of $634. Based on the closing price of about $590 on March 14, 2012, Apple’s stock is still undervalued.
[1] Source: “Can A Value Investor Buy These Stocks”, Seeking Alpha, March 13, 2012 by Stookie.
FFI Ontario Chapter Presents A Best Practices Breakfast:
How to be Successful in your Succession Planning
It’s a new year. And a successor has been chosen to lead the family-owned business into the future. Now what?
Here is a rare opportunity to learn from two seasoned experts about what steps need to be followed to prepare that person to
take over the top job. It’s a process that can involve several disciplines, some of which might surprise you. Find out about:
- Defining what is required for the future success of the business.
- Critically assessing the capability of the next generation leadership.
- Creating and executing a development plan to close the gaps over a defined time
Anyone who advises family business owners is encouraged to attend.
Presented by:
Colleen Brydon and Bill White of CBW Associates are experienced corporate leaders who work with small to mid-sized companies to assess what is needed next in growing their business. Their combined experience spans business strategy, manufacturing, process improvement, organization design, capability planning, leadership and board effectiveness.
When
January 25, 2012
8:00 AM to 9:30 AM
Where
Marsh Canada Boardroom
Brookfield Place, 161 Bay Street, 14th Floor, Toronto, ON
Price
$30 for members and guests
Coffee, tea, juice and a light breakfast will be served. This event is hosted by Marsh Canada Limited.
Seating is limited. If you would like to attend, please send me an email at broher@fullerlandau.com so I can email you an invite.
A long-term client of our firm, Salit Steel will present its amazing story of a century long business success on November 29, 2011 during a Family Firm Institute (FFI) Ontario Chapter Event.
You won’t want to miss Steve Cohen, fourth generation owner of 100-year-old Salit Steel, and Alan Litwack, partner in the Business Law Group of Miller Thomson, LLP, for a robust exploration of succession planning and what keeps Salit Steel resilient.
From scrap yard to steel company, Salit Steel has galvanized four generations to create a company with markets across Ontario – against better-capitalized competitors. Today the company continues to flourish with two primary divisions, Rebar and Steel Service Center, serving Southern Ontario in the traditions long ago proudly established by Myer Salit in 1905.
This is an unusual opportunity to hear first-hand what obstacles and opportunities confronted Myer Salit who started the company in Niagara Falls, ON with resolve, a vibrant work ethic, an idea – and little else. You’ll also learn of the strategies that kept subsequent generations not only engaged but also eager to build on the original dream.
The ‘nuts and bolts’ will be also discussed, ranging from an estate freeze to succession strategies that have contributed to the success of the business.
The event will take place on November 29, 2011, 5:30 PM to 7:30 PM at Ivey ING Direct Leadership Centre (130 King Street West, Ground Floor, Toronto, ON M5X 1A9). To register, please click here.
FFI is an international professional membership organization dedicated to providing interdisciplinary education and networking opportunities for family business and family wealth advisors, consultants, educators and researchers and to increasing public awareness about trends and developments in the family business and family wealth fields. Please visit the direct link to the Ontario Chapter at: http://ontario.ffi.org/.
For information on the Ontario Chapter, please contact Larry Klar, President, at klar@argosypartners.com or (416) 867-8090.
Bruce Roher, CA • IFA, CBV, CFE
President
Fuller Landau Valuations Inc.
151 Bloor Street West 12th Floor
Toronto Ontario M5S 1S4
broher@fullerlandau.com
416.645.6526 Direct
416.645.6500 General
416.645.6501 Fax
Just as moving into a new life stage requires careful preparation, transitioning your business into a new phase calls for thorough planning. Read more by clicking below:
Succession Planning Bakers Journal
Bruce Roher, CA • IFA, CBV, CFE
President
Fuller Landau Valuations Inc.
151 Bloor Street West 12th Floor
Toronto Ontario M5S 1S4
broher@fullerlandau.com
416.645.6526 Direct
416.645.6500 General
416.645.6501 Fax
An interesting Ontario case was recently decided where the court refused to restrain a defendant from holding a special shareholders’ meeting to remove his brother as a director of family corporations. The defendant owned 55 per cent of the shares and his brother, the plaintiff, owned the remaining shares. The court was not satisfied based on the evidence presented that holding a special meeting to elect new boards of directors would be unfairly prejudicial or oppressive to the rights of the minority shareholder. The court held that the issued could be revisited if after the change of directors, there was oppressive conduct. See Witiluk v. Witiluk, [2011] O.J. No. 613, Ont. S.C.J., Warkentin J., Jan. 31/11. Digest No. 3041-008.
Bruce Roher, CA • IFA, CBV, CFE
President
Fuller Landau Valuations Inc.
151 Bloor Street West 12th Floor
Toronto Ontario M5S 1S4
broher@fullerlandau.com
416.645.6526 Direct
416.645.6500 General
416.645.6501 Fax
I recently heard a stat that every day 1,000 boomers are turning 65. Many of these boomers who own a business have no desire to retire. However, many may want to spend more time away from their business to accomplish their personal goals or do things they enjoy.
Providing key managers with a minority share interest in the business can be a way to facilitate the owner’s wish to spend less time in the business. At the same time, the key managers will be more locked into the business and will likely act more like owners than employees.
If you are considering selling or transferring shares to a key employee or to a third party, a valuation of the company’s shares will be necessary. The value of your business is based on the maintainable future cash flows, to which multiples are applied reflecting the internal and external risks inherent in the business, industry and economy.
Keep in mind that one day, when you are ready to retire, the minority shareholder may be interested in acquiring your remaining shares of the business.
In situations where an employee who is also a shareholder is terminated, a valuation of his or her minority shareholder’s interest may be necessary.
The shareholders’ agreement must first be examined to determine if a buy-sell provision exists, whether or not the remaining shareholders or the company are compelled to buy the departing shareholder’s interest at a certain amount or at “fair market value” or if there is a pre-determined valuation method or formula which must be applied. The agreement might also address whether or not a minority discount is applicable in the circumstances.
The shareholders’ agreement may also specify the process by which the departing shareholder’s interest must be valued. For example, the shareholders’ agreement might provide that the fair market value must be determined by a Chartered Business Valuator agreed to by the shareholders. The agreement might specify that the resulting valuation is binding on the parties with no right of appeal, or it might allow for the valuation to be arbitrated if the parties do not agree with the valuation.
In circumstances where the majority shareholder(s) have unfairly prejudiced the rights of the minority shareholder, it may be appropriate for the minority shareholder to issue an oppression claim against the majority shareholder(s).
In my valuations practice, I help majority and minority shareholders deal with the valuations required in these situations. It is critical for the parties to consult with independent legal counsel to ensure that their rights are protected whether they are majority or minority shareholders. If you would require a recommendation for an employment, corporate or litigation lawyer, please contact me using my contact details below:
Bruce Roher, CA • IFA, CBV, CFE
President
Fuller Landau Valuations Inc.
151 Bloor Street West 12th Floor
Toronto Ontario M5S 1S4
broher@fullerlandau.com
416.645.6526 Direct
416.645.6500 General
416.645.6501 Fax
An interesting new source of information is available for those of you dealing with divorce. Arianna Huffington and Nora Ephron have launched “The D-Word” on the site, The Huffington Post. The website can be found at www.huffingtonpost.com/divorce . It offers financial advice and interesting posts such as “How to Choose a Divorce Lawyer” and “Dealing with Dollars”.
Bruce Roher, CA • IFA, CBV, CFE
President
Fuller Landau Valuations Inc.
151 Bloor Street West 12th Floor
Toronto Ontario M5S 1S4
416.645.6526 Direct
416.645.6500 General
416.645.6501 Fax
