Value can exist in different forms, whether as tangible or intangible assets of a business, an investment or intellectual property. In today’s global economy where opportunities exist at every level, it is important that companies have the ability to assess whether these opportunities/transactions are value enhancing or destructive to the business.
It is because of this that valuations are a critical component in the decision making process for mergers and acquisition transactions, tax structuring, dispute resolutions, corporate restructuring and accounting or financial reporting.
Valuation can be controversial and subjective so an independent and robust opinion which will stand up to scrutiny is necessary. Additionally, changes within the global business environment in recent years have necessitated the use of professional valuation expertise.
We provides valuation support to our clients engaged in merger and acquisition activities. Leveraging on our industry knowledge held by our industry specialists, we not only take into account characteristics which are specific to a particular industry or country but also the strategic objectives our clients have for the particular transaction. It is with this specialist knowledge and understanding of our client’s needs that enable us to conduct valuations from a commercial perspective.
We provide valuation support to our clients engaged in merger and acquisition activities and offer the following services:
4 Benefits of a Business Valuation:
1. Greater Knowledge of Company Assets:
As a business owner, it is important to obtain an accurate assessment of the business assets. Estimates are not acceptable as estimates can be seen as a generalization.
By understanding a more proper financial figure, or a range of values to be gained from the valuation processes, business owners can know how much to reinvest into the company and how much to potentially sell their company for.
2. Broader Understanding of Company Resale Value:
Often times, a business owner does not contemplate selling their company until an event occurs. As such, it is important to contemplate selling your company today even if the time frame is 2 to 10 years from now. By understanding the value today, you will have an opportunity to take more time to increase the company's value to achieve a higher selling price.
Understanding what your company’s resale value is also enables you to negotiate a higher selling price. A valuation specialist will provide a list of comparable transactions to assist in solidifying your stance on the higher selling price.
3. More Accurate Company Value:
Every business owner has an idea of what the business is worth through observance of market data. However, a business valuation from a reputable company will be able to accurately assess your company value. Although a business valuation may confirm what you observed from market data, a business valuation goes beyond that and provides additional information.
For instance, if you are looking to sell your business, a valuation assists in identifying the strengths and weaknesses of your business when compared to those operating in your industry. In addition, a business valuation report can point out areas of your business that you should focus on in order to make your business more sellable and profitable.
4. Higher Bargaining Power During Mergers/Acquisitions:
If an interested party approached you about purchasing your company, you should be prepared to show them what the value is, what its asset withholdings are, how the company has grown, and how it can continue to grow. Take note that most interested parties will attempt to acquire your business for as little as possible.
With a business valuation, you know the value of your company and are able to negotiate the purchase price by showing a consistent trend in value growth provided through the business valuation annual exercise.
If you are offered less for your company than it is shown to be worth, reject the deal or offer to enter negotiation mediation. This can help both sides come to a comfortable agreement.
