Our solvency opinions deliver a comprehensive analysis of a company’s balance sheet strength, its ability to repay debt, and the reliability of its cash flow.
As you prepare for a corporate transaction, trust Eton’s extensive experience in transaction valuations and advisory services to ensure thorough, confident due diligence—providing the clarity and assurance you need to move forward with certainty.
Eton Venture Services offers independent solvency opinions to boards of directors at private and public companies, attorneys, hedge funds, pension and private equity funds, family offices, and lenders.
As leveraged transactions and recapitalizations rise, the need for rigorous, objective analysis has never been more critical.
Our team works closely with yours to deliver a thorough solvency review, ensuring your transaction is sound and sustainable. Should your decision ever face scrutiny, Eton stands behind its opinion and will defend it in court if necessary—providing not just a service, but the assurance that your business is protected against future risks.
Unbiased, third-party analysis of a transaction to determine whether the deal terms are fair to the shareholders of the companies involved.
Eton offers robust, independent transaction opinions that bring fairness, transparency, and risk mitigation to your full deal process.
Our advisory services support you at every step of the M&A process, whether you’re buy-side or sell-side.
Our opinion helps companies avoid subjecting the firm to undue financial distress and potentially fraudulent transfers.
At Eton, we serve boards of directors at private and public companies, attorneys, hedge funds, pension and private equity funds, family offices, and lenders.
With our specialism in valuations and broad range of transaction experience, we can bring a confident objectivity to your decision-making process.
A solvency opinion is a formal evaluation conducted by independent financial experts to assess a company’s capacity to meet its financial obligations after a significant transaction, such as a merger, acquisition, or leveraged buyout.
The analysis reviews assets versus liabilities (the balance sheet test), where the subject company will be able to pay its debts when they mature, and the health of the companies cash flows.
Solvency opinions are essential in providing stakeholders with confidence in the financial soundness of the proposed transaction. They serve as a vital risk management tool, supporting corporate governance and informing decision-making processes.
When considering significant financial transactions, a solvency opinion becomes a critical element of due diligence. It is particularly relevant in leveraged buyouts, substantial dividend recapitalizations, major share repurchases, and complex mergers or spin-offs that materially affect the company’s capital structure.
Obtaining a third-party solvency opinion is a cost-effective way for a board of directors to fulfill its fiduciary duty during transactions.
This opinion helps mitigate risks, including potential personal liability for directors, by providing critical information on the company’s ability to remain solvent and pay dividends, thereby protecting against claims of fraudulent conveyance and breaches of fiduciary duty.
The solvency opinion process entails a rigorous financial analysis over several weeks (or shorter, but that comes at a higher fee).
Key stages include:
How long the process takes varies with transaction complexity.
It requires close collaboration between the advisory firm, company management, and legal counsel to ensure a thorough assessment of post-transaction financial viability.
Solvency opinions are independent, objective assessments that evaluate a company’s ability to meet its debt obligations and continue operations following a significant transaction or restructuring event. These opinions offer several benefits in the context of corporate restructuring, including:
