FINANCIAL SERVICES

VALUATIONS

One of the more important services that the investment banker provides is to render an opinion of the value of the corporate enterprise.  A number of techniques are utilized to determine the value of the company.  No single methodology is universally applicable in determining the fair market value of a business. A complete and objective business valuation that compares a number of methods is generally the starting point for sellers and buyers of on-going businesses.  It is important to note that accurate data on market valuations of private companies and private company M&A transactions are often illusory or not published. It is critical, therefore, to establish quantitative assessments of value from an experienced investment banking firm or a valuation firm.  These estimates should be consistent with realistic shareholder expectations. 

 

Most investment bankers will not prejudice the counterparty with a specified valuation, given that synergies and valuation metrics of the buyer are generally not known. 

 

Armed with a professional opinion of value using several different analyses will give the shareholders a better understanding of the merits of offers that may be received from buyers. In the final analysis, it is the market that will dictate the value; i.e. the price and terms that a business will transfer between a willing buyer and seller when neither is under any compulsion to buy or sell, and both parties have access to all relevant facts and understanding of the business being sold. 

For more information, download the following:

VALUATION METHODOLOGIES

GRAND AVENUE CAPITAL

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Pasadena CA 91105  l  U.S.A.

 

solutions@grandavenuecapital.com

+1 626.676.1880               

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