Business valuations are at best, an inexact science. There are many formulas and approaches used by appraisers to assess the “stand-alone” value of a company. In fact, we receive phone calls every month from CPAs and Appraisers looking for “second opinions” or sanity checks. Many factors impact value. Some of these include: financial information; the “quality” of revenue and earnings; trends; industry sectors; business history; management depth; structure of deals; terms; assets; competition; client concentration; suppliers; margins; barriers to entry; legal; environmental; vulnerabilities; external factors; strengths; weaknesses; and others. Issues like these, along with the ability of a buyer to grow the company profitably, impact risk and stability.
Financial analysis – historic and projected – must be evaluated closely. Defensible recasting and reconstruction of financial information is critical. This exercise must comprise sound arguments and a rational basis for all financial adjustments. Poorly conceived arguments will raise the specter of instability and initiate questions about the true financial strength and earnings of the company. Concerning these and other valuation issues,“ beauty is in the eye of the beholder.” Buyers often evaluate companies from different vantage points, and thus, render materially different value conclusions.
We present compelling arguments to maximize value, structure, terms and conditions. There are two sides to every issue; however, we know how to position your company.
Frequently, selling the “synergistic value” that may be reaped by a strategic buyer can significantly enhance value and ultimately price. One of the best methods to maximize value is to market a company aggressively to the best “universe” of strategic buyers. By doing so, we can generate a
competitive environment, thus leveraging the best price and terms for your benefit.
We will provide you with our opinion of value after reviewing financial information and discussing the operational and infrastructural intricacies of your business.