Valuation
At certain times, it may be useful and necessary to perform a valuation of a company, a part of the company (such as a business unit) or an investment project.
This might apply in the context of:
- Preparing for a transaction (such as sale of the company)
- Internal restructuring at corporate or shareholder level
- Stock option plans
- Disputes
- Major investment plans
- Other opportunities or needs
Finpartners can compile such a valuation based on all commenly accepted and applicable valuation models.
In the case of the Discounted Cashflow method, the valuation will be carried out on the basis of an existing detailed, long term financial plan or Finpartners can update or create the financial plan in consultation with the client.
For the Multiple Analysis (or Peer group analysis), comparable transactions (recent sales) or valuations (e.g. on the basis of stock-market listings or others) are used as the basis. This method also requires a good analysis of the company being valued and its peers, in order to ensure that apples are not being compared with pears.
The (corrected) net asset method requires a detailed analysis of the existing balance sheet items, and corrections may or may not need to be implemented for tangible and intangible items (valuation reduction or revaluation or goodwill corrections).
Finpartners can also check, challenge or validate a valuation drawn up by third parties ("second opinion").
"The value of something is what a madman would pay for it." However, it is useful for both the buyer and seller to have a realistic valuation before engaging in a transaction, so that the chance of nasty surprises or bad, emotional decisions is reduced!"
