Ebook: Company Valuations

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.

The purpose of the first edition of our e-book was to offer practical insights that took valuation beyond theoretical frameworks and acknowledged the realities of M&A practitioners. Published in 2021, it addressed the unique nuances of that period, including considerations for the unprecedented challenges posed by COVID-19 and the influence of government relief schemes on future valuations.

In this second edition, we remain committed to deepening your understanding of valuation and its real-world applications. We have updated the content to reflect the evolving operational and economic landscape post-pandemic, while also providing further clarification on common methodologies and approaches. Furthermore, in response to the increasing demand that we have experienced in recent years, we have introduced two new sections: valuations of intangible assets and valuations of growth shares.

The e-book not only provides an extensive explanation of the methods and application of different valuation approaches, but also walks readers through:

1. How price and value differ from one another
2. The adjustments that need to be made to a company’s financials in order to calculate the most appropriate valuation
3. The different types and mechanisms of consideration paid in M&A transactions
4. Exploring the nuances of other types of valuations such as growth shares or intangible assets
5. 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.