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Valuations

Valuations

 

  • How much is my company worth?
  • Is a minority share of a company the same as a controlling share?
  • How much should a retiring partner be paid for his/her shares?
  • How long is a valuation valid for?

 

A valuation implies a determination of the value of a business or a specific asset at a particular time. SFA conducts corporate valuations in several areas –whether valuing a business as a whole, its shares or its intangible assets (such as patents or trademarks).

A professional and competent valuation must reach an accurate range of value as well clearly and convincingly establish how that figure was determined. Furthermore, a good valuation must be defensible and able to withstand any kind of scrutiny. The partners at SFA have conducted over 120 valuations throughout their careers.

We consider valuation as both a science and an art. We also believe it is a mistake to adopt an overly mechanical approach. This is often done through the application of “valuation multiples” and the use of standard cash flow models discounted with uncertain growth rates and questionable assumptions. The result of these valuation techniques is sometimes out of sync with the realities of the market or the intrinsic risk and potential of a particular company.

Our knowledge and experience allow us to evaluate the value generators of each company, which results in a valuation tailored to each firm. Our valuation techniques combine different approaches that analyze the unique position of each company in the market. Our methodological robustness allows us to make assumptions based on market realities while also accounting for risk factors.

A valuation goes beyond building a financial model and adjusting certain parameters. SFA’s style implies identifying and calibrating every source of value in a business and validating each of the assumptions of the projection. This includes commercialization strategies, product and service placement and accurate market gauge. Our valuations offer buyers, shareholders, consultants and managers an essential decision-making tool.

At SFA we are convinced that valuation  is a critical step in any merger and acquisition process. A robust valuation reinforces the possibility of successfully closing a transaction.