While Value DiscoveryTM provides excellent guidance regarding the potential sale price of your business, as well as guidance for value enhancement, there are circumstances when higher analysis may be required.
These include the following situations:
This may be the case where the company has business units in different industries or market sectors, each of which have different operational performance and competitive dynamics. Frequently, the company may be seeking to divest one or more non core assets. Here we may under a “sum of the parts valuation” where each unit in relation to its own performance and its peers.
Many young high growth businesses may have limited history and minimal revenues. We consider the niche that they are attempting to exploit, and analyse critically, various hypothesis regarding how the industry may look like as the business evolves from a high growth position in uncertain conditions to a sustainable moderate growth state in the future.
The value of the intangibles in certain businesses may be high. Intangible assets may include customer relationships and databases, opportunities through contracts and intellectual property such as patents and non-replicable proprietary processes. We take a market-based approach to assessing the potential of such intangibles.
As the world becomes increasingly globalised the volume of cross border transactions are increasing. Complicating issues such as international costs of capital and foreign exchange set in here, although simplification has occurred in recent years through adaptation if IFRS (International Financial Reporting Standards)
These may include businesses that operate in unstable developing economies or may have cyclical revenues such as resource companies, or who’s corporate governance is below par.
Stable businesses with predictable long term cash flows are often the easiest to value, but often, certain declining industries also have a market value in excess of their asset or liquidation value.