The realistic valuation is a critical part of the due diligence and decision-making processes. We will apply our due diligence and research findings to the most adequate methodology to answer following questions: What is the value of this asset for you? What is the realistic expectation on how much somebody else might offer for it? What value could do you strategically lose or gain from a potential move? What are the critical assumptions of the fair value? What should be the cost of capital in this particular case? What is the fair value under several scenarios of macroeconomic, industry or inside-business trends and changes?
You will get a fair range assessment of how much should you pay or receive for an asset!
Target, asset, or company valuation is a typical part of our Comprehensive Strategic, Operational, and Commercial Due Diligence Report, with the results also being highlighted in the Boardroom Summary. Occasionally, you might need an independent valuation of the existing assets or subsidiaries, or a secondary valuation to validate internal or external due diligence screening reports. In those cases, we prepare a complete Valuation Report to be delivered to you, to provide findings to be utilized in the decision-making process.
When we make the valuation, either as an independent report or as part of the CSOC Report, we apply any industry-standard methodologies (DCF, xEBITDA, xSales, Net asset value, SDE…) or any advanced models (for example, option pricing or substitution model), but only those that fit the project case. We apply between 2 and 4 methodologies on every project. The choice of an adequate method depends on the size, industry niche, potential transaction scope, quality of underlying data, and the client’s preferences. We approach every valuation project independently, with a fair, balanced, and honest view, as our services do not result in retainer fees or success fees for you.
The independent valuation report is typically 7 to 10 pages long, in .pdf format, or if the valuation is part of the CSOC Report, it takes a bit less space. We make easy-to-understand and adjust models that factor in critical assumptions, trying to avoid overcomplicating or overengineering the model. We will deliver a valuation summary, a list of essential assumptions under different scenarios, and an accompanying spreadsheet model for your internal use for further scenario analysis or negotiation.
Our estimates are made in ranges (not point estimates) as we know that the quality of the valuation model is as good as that of relatively uncertain assumptions. We try to narrow the ranges by applying scenario analysis or a risk-adjusted distribution of potential valuation results. The aim is to provide you with a goal post beyond which it makes sense to act on a deal.
