Acquisition valuation is vital for the pricing of a transaction and identifying the most suitable target companies for the business expansion. Company acquisitions are a faster way of growing a business compared to the traditional methods. Mergers are very complex and that is why our team proves useful because of their specialized skills and experience that is sufficient in understanding the business of the clients in a range of industries. Kove takes time to understand the business and its goals so that it can employ the most appropriate methodologies to enable clients make confident and strategic decisions.
Companies that lack experience and knowledge tend to always overpay and overlook potential risks during a merger whenever they attempt to do a company valuation for acquisition. Our team of experts makes sure you get the best price and help you in assessing all potential scenarios involved in the complicated process.
Benefits of Acquisition
Determining company valuation for acquisition is an essential part in the merger process because it helps identify the right target company.
Kove conducts the acquisition valuation with the following goals in mind:
- To pick winners early enough to help clients develop their businesses
- To improve the performance of the client courtesy of competencies and advantages it did not have before the merger
- To quickly acquire skills and technologies at lower costs
- To increase cost savings from different sources such as research and development, marketing, administration and distribution
- To build an increased market presence while reducing the competition
Kove has conducted company valuation for acquisition in various industries where the capital assets, intellectual property, intangible assets and securities were taken into consideration. As a firm, we ensure to evaluate every key aspect of a business including the financial performance, intangible assets, market factors and the management team. Visit us and learn more!
Significant Factors in a Company Valuation for Acquisition
Various factors are taken into consideration when conducting the acquisition valuation regardless of the company size and industry it belongs. The factors include:
- Historical and future financial performance: A company will be valued at a higher price if it shows consistent revenues because of more potential for growth. We look at the hard numbers such as historical profits, assets, cash flow and liabilities as well as the soft figures like income and cash flow projections.
- Intangible assets: The strength of the company brand, patents, location and goodwill contribute to the value of a company and make significant factors in the acquisition valuation.
- Customer base: A company that has a strong and loyal customer base is deemed to have a greater asset and more so for the buyers that wish to sell directly to this audience.
- Experience and skills of the management team: The performance of a company greatly depends on its leaders. It is thus paramount that there be a strong team to oversee and run the company because investors are not usually involved in the day-to-day operations.
- Market factors and competitors: The value of other comparable firms will also be considered in the process of acquisition valuation. Our experts will analyse the performance of the target company in comparison to its competition and determine whether the industry is in a state of growth or decline.
- Strong supply chain: A business that enjoys a strong supply chain has numerous advantages that include quality manufacturing and competitive prices, which result in higher profit margins.
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