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Corporate Valuation Advisors, Inc. Awarded Telecommunication Appraisal Contract with USDA

August 10th, 2017 - by CVA, Inc. | Share on:

The U.S. Department of Agriculture ("USDA") was tasked with awarding loans and grants to telecommunication companies to invest in infrastructure projects in rural areas of the U.S. to increase broadband and advanced communication offerings. As part of the award process, the USDA is required to monitor the financial operation of the companies which receive the loans. Corporate Valuation Advisors ("CVA") was contracted by the USDA to determine the Fair Market Value of the assets of certain borrowers under its loan program. Under another loan program CVA was contracted to provide valuation services related to a coal-fired power plant which borrowed money from the USDA.

The value of the telecommunication companies and power plant were determined using the Market Approach, Income Approach and an Underlying Asset Approach. Market data on publicly traded, guideline companies was used to develop relevant valuation multiples. The Income Approach employed a discounted cash flow model based on the forecasted revenue and expense projections for each company.

An Underlying Asset Approach was used to estimate the value of the tangible and intangible assets of the companies. Tangible assets of the telecommunication companies included real property, improvements to leased property, telecommunication and distribution equipment, office furniture and fixtures, data processing and office equipment, software and vehicles. Intangible assets included trademarks or trade names and customer relations. CVA conducted on-site inspections of all the telecommunication companies in order to assess the condition of the equipment and maintenance procedures employed, as well as to observe the overall operations of each company.

The telecommunications companies appraised are located in Lubbock, Texas; Frankenmuth, Michigan and Mitchell, South Dakota. The telecommunication company in Lubbock, Texas was founded in 1999. The company is engaged in the construction, management and operation of communication systems primarily in northwestern Texas.

The telecommunication company in Frankenmuth, Michigan was founded in 2002. The company provides broadband services throughout the 'thumb' of Michigan via towers. At the time of valuation the company served approximately 7,200 customers via 160 towers and 450 miles of fiber optic network. The telecommunication company located in Mitchell, South Dakota provides broadband internet service, telephone and digital television services via their advanced fiber network. The company was formed in order to establish a competitive local exchange carrier for residential and commercial customers located in Mitchell, South Dakota. In 2006, the company was granted a loan to install a fiber optic network though the twelve square mile city of Mitchell.

The power plant located in Holcomb, Kansas is a 349 MW coal-fired electrical power plant constructed in 1983.

About Corporate Valuation Advisors, Inc.:
CVA is a professional appraisal firm, founded in 1998, and located in Hartland, Wisconsin. CVA offers a wide variety of valuation services for financial reporting including purchase price allocation (ASC 805), goodwill impairment (ASC 350) and stock options (ASC 718). Transactional services include solvency, surplus and fairness opinions. We service the banking industry with machinery equipment valuations and intangible asset valuations including trademarks, patents and other intellectual property. Transfer Pricing and property taxes are CVA's primary tax related services. For more information visit: www.corporatevaluationadvisors.com. Brad Carlson, a senior manager with over eighteen years of experience can be reached via email at bcarlson@corporatevaluationadvisors.com or by phone at 262-369-0400.

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Article Number: 1455

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