Enterprise Valuation
Why Is a Company Valuation Important?
A company valuation is essential as a basis for the sale of a company. The calculated valuation range shows the current value of the company (fair value) and is an important part of the information memorandum. In company valuations, a distinction is made between absolute and relative valuation methods. Discounted cash flow statements (DCF) are used as absolute methods. The most commonly used method is the weighted average cost of capital (WACC). Another form of cash flow statement is the adjusted present value (APV) or the flow to equity. Relative valuation methods use multiples that are derived from publicly disclosed market values of listed companies in the same industry and region to determine the company value of the target company. The company value is calculated by comparing the results of the target company with the results of a peer group. This is because it can be assumed that similar companies have a comparable company value.
Reasons for an Enterprise Valuation:
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Company sale
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Company acquisition
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Succession – inheritance divisions
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Acquisition of shareholdings
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Injection of equity capital
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Initial public offering (IPO)
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Fairness Opinion
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Management buyout
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Value-Based Management
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Withdrawal of partners from partnerships
When and why do I need a company valuation?
I need a business valuation...
...when I want to sell my company to receive a fair purchase price.
...when I want to buy a company to determine the right purchase price.
...when I am planning a business succession or division of inheritance to fairly determine the value of the company.
...when I want to acquire shares in a company to know the value of the stake.
...when I want to inject equity into a company to determine the current company value.
...when I want to take a company public and need to determine the company's value for the IPO.
...when I need a fairness opinion to confirm the fairness of a transaction.
...when I am planning a management buy-out to determine the company value and set the purchase price.
...when I want to apply value-based management to determine the company’s value for informed decision-making.
...when partners leave a partnership to determine the value of the company.
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What our customers say
"The sale of the business I founded and built was a pivotal moment in my life and that of my family. As I didn't want to involve my family and immediate circle until a later date, the straightforward initial valuation using the valuation tool on the Seal the Deal website proved to be extremely beneficial. The company valuation in the form of an expert opinion was also particularly valuable, especially during the purchase price negotiations with the investors."
Robert P., owner