Valuation is at the core of all transactions, whether it be considering the sale of your business, raising equity finance or making an offer to buy another business. Unless a valuation can be agreed between the parties, the deal will not happen and is therefore fundamental to your decision making. Valuations are not an exact science and involve an element of subjectivity. The true test is what a willing buyer or investor is prepared to pay and what a willing seller is prepared to sell for or give away in terms of shares. Our experienced team can assist you in assessing a value for whatever purpose.
Typical Valuation Process
How we can assist you with valuing your business
Adjusted Underlying EBITDA
Earnings before interest, tax, depreciation and amortisation is a common factor in assessing value. Assessing the underlying position is not always straightforward and can be based on historic trading, current trading but could also factor in future trading if there is secure or contracted revenue going forward. Adjustments to give a “normal” position will also need to be factored in. Our experts can advise on how to get to an underlying position.
For profitable, trading businesses a suitable multiple is applied to EBITDA to give an Enterprise Value. We have access to transactional information which can support the valuation multiple or range of multiples based on business activity and sector.
Cash and debt adjustments
The Enterprise Value will be adjusted for cash and debt like items to give an Equity Value, which is the net value to shareholders.
To give an informed view on value, we need to fully understand your business and therefore need to spend sufficient time with you. The output from our review will be a comprehensive written report setting out our methodology and assumptions.