About the Service

WHAT IS OUR BUSINESS VALUATION SERVICE?

Detailed valuation of a business that you would like to invest in, monitor as part of an ongoing process, or consider for sale

Our Business Valuation offering aims at performing an independent and detailed calculation of the value of a company.

We have two separate offerings, the lite valuation and a comprehensive valuation. The lite valuation requires less information with its calculations being simpler in nature than that of the comprehensive valuation.

These reports can be very effective and can be used by:

  1. A potential purchaser who needs to:
    • Understand the value of a business he is interested in acquiring; and
    • Be placed in a stronger position to negotiate an appropriate purchase price, and to tailor relevant warranties, representations and indemnities in this regard.
  2. A business owner to verify the value of their company:
    • On a regular basis (ie. annually) for shareholders or lenders to measure growth performance over time;
    • According to contractual obligations such as shareholder agreements, share option plans, loan agreements, estate planning, divorce settlements, etc.;
    • Upon restructuring events such as group re-organisations; or
    • In preparation for discussions to sell the business.

WHAT WILL THE LITE BUSINESS VALUATION REPORT CONTAIN?

The report will incorporate concise calculations, assumptions and conclusions to assess the value of the business. A combination of appropriate valuation methodologies will be used.

WHAT WILL THE COMPREHENSIVE BUSINESS VALUATION REPORT CONTAIN?

The report will incorporate comprehensive calculations, assumptions and conclusions according to internationally accepted valuation methodologies and best practices.

WHAT METHODOLOGIES WILL EACH BUSINESS VALUATION CONTAIN?

A combination of methods develops mutually supporting evidence towards the valuation conclusion

Several valuation methods are used to assist in determining the value of a company. A combination of methods develops mutually supporting evidence towards the valuation conclusion. The predominant valuation approaches are:

  1. Income Approach – utilises the discounted cash flow method to quantify the net present value of estimated future benefits, which are discounted at a rate appropriate for the risks associated with those future benefits.
  2. Market Approach – this is based on a comparison of the company to comparable companies and transactions in its industry, as well as evaluating prior transactions in the ordinary shares of the company using an appropriate valuation multiple. It is a relative valuation approach as it values a business relative to other actual valuation transactions. The mechanics of the market approach involve finding a price multiple of the benchmark i.e. price to earnings ratio, EV to EBITDA, price to book value, etc.
  3. Net Assets Approach – This evaluates the market value of the company by adjusting the asset and liability balances on the company’s balance sheet to their market value equivalents.

WHAT INFORMATION DO WE REQUEST AND REQUIRE FROM YOU FOR THE LITE BUSINESS VALUATION?

Collate any necessary supporting documents to validate the financial information

After you checkout, we will request that you send us the following for our review (we will guide you through the process):

  1. Company registration documents;
  2. Signed audited Financial Statements (if available);
  3. Management accounts (including trial balance, fixed asset register, inventory listing, debtors age analysis and creditors age analysis);
  4. Budget for the current financial year and a forecast for the forthcoming 5 years (if available);
  5. Banking and loan agreements.

WHAT INFORMATION DO WE REQUEST AND REQUIRE FROM YOU FOR THE COMPREHENSIVE BUSINESS VALUATION?

Collate any necessary supporting documents to validate the financial information

After you checkout, we will request that you send us (to the extent that each apply) the following for our review (we will guide you through the process):

  1. Brief overview of the company, what products and services it sells, how it operates, who are the key people involved, what are the challenges it faces;
  2. Historical performance: If available, signed audited Financial Statements for the past three years (or a shorter period if the target company has not been in existence for that length of time);
  3. Current position: latest management accounts (including trial balance, fixed asset register, inventory listing, debtors age analysis and creditors age analysis);
  4. Future projections: budget for the current financial year and a forecast for the forthcoming 5 years (if available), with assumptions and supporting workings. These would typically include revenue targets, product and service gross profit margins, fixed overheads, further capex investment requirements, assumptions for the expected annual growth rate of revenue and operating expenses, and industry and competitor trends and considerations;
  5. Banking and loan agreements: for an overall examination and evaluation of the company’s capital structure, short-term and long-term debt obligations, interest rate pricing, assess the company’s ability to service its outstanding debt, and understand the capacity to secure more financing where required;
  6. Other material information: all other information not mentioned above that may be relevant to the company and the industry, such as competitor analysis, industry market share, strategic vision, etc.

WHAT IS THE COST OF THE LITE VALUATION REPORT?

ZAR 7,015.00 (Incl. VAT)

This report is charged out at our standard fee of ZAR 7,015.00 (Incl. VAT)

We require 50% payment upfront and the remaining 50% when the report is ready to be released.  Note that this report will include the standard service procedures review of the documents and information provided by the client. Should you wish for a more in-depth review of certain financial aspects and/or greater volume of information, this will be quoted for separately based on the scope of work.

WHAT IS THE COST OF THE COMPREHENSIVE VALUATION REPORT?

ZAR 14,490.00 (Incl. VAT)

This report is charged out at our standard fee of ZAR 14,490.00 (Incl. VAT).

We require 50% payment upfront and the remaining 50% when the report is ready to be released.  Note that this report will include the standard service procedures review of the documents and information provided by the client. Should you wish for a more in-depth review of certain financial aspects and/or greater volume of information, this will be quoted for separately based on the scope of work.

HOW LONG WILL WE TAKE TO COMPILE THE LITE REPORT?

We take a maximum of 1 week to compile the report

We take a maximum of 1 week to compile our standard report, once all the required documents and information have been received. Please note that our turnaround time may vary depending on the volume of data to analyse.

HOW LONG WILL WE TAKE TO COMPILE THE COMPREHENSIVE REPORT?

We take a maximum of 2 weeks to compile the report

We take a maximum of 2 weeks to compile our standard report, once all the required documents and information have been received. Please note that our turnaround time may vary depending on the volume of data to analyse.

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