Delaware Court Determines ISN Value, Despite Divergent Expert Opinions

The Delaware Court of Chancery recently determined the value of ISN Software Corporation stock to be $98,783 per share, 158% more than the merger price. ISN did not rely on a financial advisor, investment bank, or fairness opinion, but self-determined that its stock was fairly valued at $38,317 per share. Petitioners Polaris and Ad-Venture objected, and promptly filed suit. With experts for all parties submitting wildly different valuations, the Vice Chancellor was forced to rely on his own, hybrid discounted cash flow (“DCF”) analysis, and ultimately pegged ISN’s fair value well above the merger price. Litigators would be remiss in neglecting to glean insight from the published opinion, which covers critical valuation parameters, including cash flow projections and discount rate factors.