Price Bailey undertake many valuations every year for a variety of purposes ranging from M&A, dispute, investment, share options and many more.
When clients ask us for a valuation the expected output is typically a valuation letter supported by research and workings. Whilst this is the typical result of our work, we are increasingly finding that alternative deliverables are actually preferable to clients. The purpose of the valuation, and how it will be used, are both essential and should drive the output.
In addition to being expert valuers, our team also provide lead advisory support to help negotiate M&A and funding transactions, undertake Financial Due Diligence, and provide strategic advice; we, therefore, bring experience of how valuations work in practice, and not just in a letter. We regularly find that buyers, sellers and interested parties are basing their valuation expectations on misleading, false or naïve assumptions. For example, by basing expectations on poor information or because they were not aware of certain concepts in valuation methods and pricing. We have also seen a gap between the “theory” that a valuer considers in writing their valuation report, and the reality that an M&A practitioner lives. We have, therefore, put this document together in order to help our clients overcome these challenges. This e-book goes beyond the theory on valuation and also considers how these concepts are applied in reality and when it is necessary to be in a live deal scenario to answer certain questions.
The e-book not only provides an extensive explanation of the methods and application of different valuation approaches, but also walks readers through:
- How price and value differ from one another
- The adjustments that need to be made to a company’s financials in order to calculate the most appropriate valuation
- The different types and mechanisms of consideration paid in M&A transactions
- Some of the nuances of other types of valuations such as share options, funding or IP
- Guidance on what type of valuation and what type of advice you may require depending on your particular circumstances and purposes of seeking a valuation.
It is our aim that this comprehensive guide provides clarity on how valuations work in different circumstances, why it is about more than just an average multiple of a data set x a profit figure, and why it is important to know when you need a valuer or a lead advisor.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide. The authors or the firm can accept no responsibility for loss occasioned by any person acting or refraining from action due to this material.