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D. Black Hills Trucking
1. Value of Total Equity on a Marketable Basis
a. Kimball Report
Mr. Kimball applied a combination of the guideline company
and net asset value methods to value the subject interests in
Black Hills Trucking as of June 4 and June 30, 1994.
Under the guideline company method, Mr. Kimball identified
10 companies from the trucking industry and analyzed revenue and
TBVIC multiples, weighting each multiple equally. He used data
from the latest year and an average of the 5 preceding years to
calculate the multiples. Mr. Kimball selected revenue multiples
that were lower than the lowest guideline company multiples;
however, he selected a TBVIC multiple that approximated the
median value among the guideline companies. After subtracting
debt to shareholders of $2.8 million, Mr. Kimball concluded that
the fair market value of Black Hills Trucking’s total equity on a
marketable minority basis was $5,953,417, under the guideline
company method.
Mr. Kimball calculated total equity on a minority basis even
though he was valuing a 58.16-percent interest as of June 4,
1994, because he found, consistent with his analysis of Belle
Fourche, see supra p. 218, that the Black Hills Trucking buy-sell
agreement eliminated any premium for control that might otherwise
have attached to a block of stock representing voting control.
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