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Sale Business Value

Who benefits from a Pre-Sale Value of the business? And, should this analysis be separate from the engagement of an investment banker?

In some instances, when the seller does not accept the value range suggested by an IBanker, our firm is hired to provide a detailed valuation. Sometimes a buyer requests a similar analysis. When we are retained as investment banker, our initial preparation of the Sale Memorandum (Book) involves all of the elements of a valuation. However, rather than concluding a value, we provide sufficient basis for the market of buyers to peg a price.

The Pre-Sale business valuation analysis is critical to both buyer and seller, especially, if it provides answers the following issues:

  1. Realistic revenue forecast.
  2. Supportable adjustments to EBITDA.
  3. Reflection of the IP and how it drives value.
  4. Properly reflects working capital expenditures (cap ex).
  5. Isolation of profit margins by product or service category.
  6. Alignment of strategic synergies for specific buyers.
  7. Roadmap for conducting essential due diligence.
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