Company Valuation - Valuation

Frequently Asked Questions about Business Valuation:

1. Do I need a business valuation?
If you are interested in acquiring all or part of another company, at some point you may need an assessment of its value. The following are examples of situations where owners are likely to need our business valuation services:

• Business between companies:

  • buy a company

  • sell a business

  • Facilitate an owner buy-in or buy-out

  • Obtaining debt or equity financing

  • Fusions and acquisitions

  • Acquisition or sale of intangibles

  • Purchase of equity interest

  • Business Expansion

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• Tax planning and compliance

  • Implementation of a real estate plan

  • Establishment of a family investment entity or other type of investment entity.

  • Business Combination (CPC 15 - R1)

  • Impairment Test

  • Tax savings in the amortization of goodwill/discount

  • Benchmark

  • Dividend Distribution Equity Planning (Payout rates)

• Litigation and business disputes

  • Division of Property in Divorces

  • Resolution of disputes between shareholders

  • Exercising the rights of dissenters

  • Economic Damage Assessment

  • bankruptcy filing

  • Other Circumstances

• Other Circumstances

  • Owner Succession Planning

  • Impairment Tests

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2. What is the company valuation process?
One of the most common questions about business valuation services is, "What are the steps to valuing a business.

• Confidentiality and commitment agreement.

As with most professional services, the relationship between the client and Valini will typically be set out in a written agreement (agreement). This agreement will define the scope of the appraisal project, the obligations of each, the estimated term, the fees and other important elements of the relationship between the parties. It will also be required a company representative, who will be responsible in making the project on time and scope walk hired.

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• Request for information.

The next step in the business evaluation process is information gathering. This usually comes in the form of a list of requested data and documents, such as financial statements, organization chart, manager qualifications, owner compensation data, brief descriptions of the business's history, its products and services, its customer base and the competitive scenario.

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• Preliminary analysis

After obtaining all the necessary documentation, Valini will review, organize and carry out initial analyses, independent industry surveys, economic drivers and other issues with the aim of preparing the interview with the owners and/or key management members.

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• Interviews with management and company visit

This is the moment where Valini will seek to understand “the story behind the numbers”, the segment in which the company is inserted, the organizational structure, the marketing activities, customers and main risk factors.A significant portion of this discussion it will also involve the company's historical financial performance and future prospects. This interview can be conducted in person. These points are defined in the confidentiality agreement. Knowing the company's facilities is generally helpful, but not a requirement. Still, a site visit allows certain qualitative judgments about the business as well as the confrontation with the information provided.

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• Valuation Analysis

Valini will now synthesize the information, documentation, interview results and independent research to determine how these factors affect the company. It is now that we will define one or more appropriate assessment methodologies. When using multiple valuation methodologies, each will usually give a different indication of the value of the stake. At this point we will use our experience and judgment to reconcile these disparate indications of value in order to arrive at a final opinion.'

• Reporting and follow-up discussions

At this stage, the work can be done in two ways:

• Issuance of a final report in "draft" form, allowing the client and its key managers to review the facts and rationale described in the report and after discussions, issue a final report.

• Validation of each step during the assessment and ending with the issuance of a final report.

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We adopted the standard for evaluating companies suggested by the CVM - Brazilian Securities and Exchange Commission, using three analysis methodologies: Discounted Cash Flow Method, Market Multiples and Equity.