Business Valuation

Business Valuation

Business valuation is a process used to determine what a business is worth. Usually, every business owner considers getting a business valuation at the time of a major acquisition, the sale of the business, resolving a shareholder dispute or joint venture dispute, but every business needs to have an up to date business valuation on hand at all times. Possible reasons that a business owner or company may need a business valuation:

  • Setting a base value upon  which a strategy can be developed to enhance the business profitability
  • Opportunity to sell or merge
  • Raising funds
  • Addition of a new owner into the business
  • Contemplating an exit strategy of partners or shareholders
  • Business expansion strategies
  • Critical input for various decision-making process undertaken by management
  • Valuation of convertible securities like CCD, CCPS

Approaches and Methodologies for Business Valuation

There are three fundamental ways to measure what a business is worth:

  • Asset Approach
  • Income Approach
  • Market Approach

To conclude what a business is really worth, the results of several business valuation methods can be taken into consideration.

Our business valuation experts will coordinate with you to understand the business dynamics and its key value drivers. We assist by performing a valuation of the business, preparing Information Memorandum/Investor Presentations and supporting in equity or debt syndications.?

Valuation of Brands, Intangible Assets and Intellectual Property

The role of brands, intellectual property rights (IPRs) and intangible assets are increasing in setting up the foundation for market dominance and continuing profitability of leading companies. These assets are widely accepted as the key drivers and contributors to the value and growth of businesses. Bankers, Investors and other stakeholders are most keen to the Valuation of Intangible Assets nowadays. Majority bankers and financial institutions are now in the path of funding against reputed brands and strong intangibles. Core Intangibles are being offered as collateral securities. This has led to a wide increase in the role of intangibles from the financial side. Moreover, the valuation of these intangible assets and valuation of Intellectual Property are required to be monitored on an ongoing basis. We have the professional and technical expertise to help our clients identify and depict the accurate value of their Intangible assets and Brand using approaches which are globally accepted and understood. Patents & Trademarks, Brands, Knowhow & Trade secrets, Computer software, licensing agreements and Customers are some of the important intangible assets. Intangible valuation is required for accounting purposes, mergers and acquisitions, reporting as per the applicable financial reporting framework, purchase price allocation,joint-venture negotiations etc.

Valuation of industrial assets, Plant & Machinery

Depending on the specific usefulness, utility or service of plant & machinery to the industry it belongs, valuation methods and value differ. It is very important to consider the contribution of the asset to the goods and services it is set up for. Estimating the worth of the plant and machinery in monetary value and how much it contributes to the revenue generation capacity of the entity is covered as a part of the valuation assignment.

Valuation of Plant & Machinery will be required to be done for Mergers & Acquisitions, Banking (Lending purpose), Financial reporting, Claims & Litigations support, Strategy planning & Management decision making, Disinvestment, IPO purpose, Impairment analysis etc.

Valuation of Real estate

Our independent valuation services allow companies to understand the value of an entity, asset, or liability so they can make informed business and investment decisions. Our mix of services is broadly based and tailored to our client’s specific needs and assist in their assessment of development projects, acquisitions, expansions, refinancing, restructuring and other transactions.

Valuation of ESOP’s & Sweat equity

Employee stock option plans and schemes are being widely offered to employees nowadays, based on the concerned fair value and intrinsic value. Appropriate employee compensation expenses and reserves need to be created for the same.ESOPs need to be valued appropriately for regulatory & tax compliance purposes.

Estimating and arriving at the value of such share-based payments is a complex procedure depending on numerous variables and unique terms. Match valley assists both public and private organizations by providing tailored valuation models according to the client requirements. Assistance is offered in selecting the most appropriate method & other parameters.

Tax, Transfer pricing & Company law matters

Valuations are required before implementing various tax strategies as they are highly scrutinized by regulatory authorities. We have skilled expertise in tax purpose valuations and related consulting.

Our valuation service offerings:

  • Valuation with respect to capital gain tax purposes
  • Purchase price allocation for slump sale transactions
  • Tax restructuring valuations
  • Valuation for cross-border transactions involving transfer pricing regulations
  • Valuations in relation to corporate restructuring as per Companies Act

Fairness opinions

A fairness opinion is an independent objective analysis compiled by qualified analysts or advisors from a financial point of view as to the fairness of the financial terms of a business or corporate restructuring. There are many reasons for fairness opinions, most of which deal with transactions involving publicly listed and closely-held companies.

A fairness opinion provides guidance to the parties involved in a merger, takeover or acquisition. This could include the shareholders of the company being acquired. It is essentially a professional opinion supported by collected data.

The necessity for a Fairness opinion?

  • Merger or Acquisition by a public company
  • Division divestment by a public company
  • Management buyout
  • Bankruptcy, liquidation and Corporate Restructuring