Business Valuations
The Value of a Business
What is the real value of your company ? What is your business worth ? How can a detailed valuation model help to determine your true company value ? What are current multiples used in your industry ? What does a buyer appreciate in your company ?
There’s many different angles and aspects involved in a valuation. Valuations depend on the industry your company is in as some industries pay higher multiples as growth perspectives are higher or more synergies exist. The value depends on the state of the economy, in a recession valuations are usually lower than when the economy is booming. It also depends on key drivers of your company and how it is structured. Do you have long term contracts where your customers are ‘locked in’ ? Is your legal and management structure set-up well ?
What matters in the end is what a serious buyer is willing to pay for your company and what you are willing to accept. Valuation is as much an art as it is a science is very often said. The way a company is being positioned and especially the fit to a suited buyer can help much in achieving a high valuation.
Valuations Methods
How to value a business technically ? The valuation of a company can be done by many methods and a lot of literature exists around the topic of valuations. The DCF method (Discounted Cash Flow Method) is very often used. Another way to value a company is to take industry multiples (mostly EBITDA) and use these on the companies financials to come up with an estimated valuation. These multiples are available from previous deals done in the market by our team or from publicly available information.
Business Valuation Models
The people in our team prepare detailed valuation models depending on the requirements of each specific project. We have the know-how and resources in house to prepare a specific valuation that fits your needs. When doing a business valuation it is important to ‘normalize’ the financial accounts for ad hoc items to get the true view of a companies financials.
Valuation differences per industry
Corporate Finance in Europe works with industry teams that are up to date with the latest valuations in the industries we work in. We know what individual buyers have paid and are willing to pay for your company. We also know how to best position your company so it is most attractive for a buyer.
Obviously differences exists in valuations between companies in other industries. The specialty chemical distribution, BPO (Business Process Outsourcing) or forwarding industries all have it’s own valuations. We have M&A and valuation specialists that have their background in each industry and are best suited to help you with a valuation for a specific company.
