“L’évaluation des entreprises dans le contexte actuel de crise”, by Thomas HACHETTE, published in Option Finance – N°1552 – March…
To accurately value a company, it is important to understand its business model and environment, as well as having a clear view of the following:
- its financial health;
- its growth prospects;
- its profitability prospects.
We value companies, public or private, in a range of different situations, such as:
- mergers and acquisitions;
- disposals of minority interests;
- company handovers or transfers;
- takeovers involving an illiquidity discount;
- assessments of minority holding discounts, LBOs, RES.
We use intrinsic valuation methods (net asset value, discounted cash flow, or adjusted net present value), relative methods (analysis of comparable public companies or transactions), as well as specific valuation methods, such as the Real Options Method (valuation of flexibility and growth opportunities) or specific methods for the valuation of intangible assets (patents, brands, etc.).
To implement these valuation approaches, we discuss with the company’s management to better understand its activity, where the company is operating, on which market segments, its actual and future strategy as well as the risks it may face. Thus, the value we come up with does not only derive from the assessment of financial data but also the modelling of the company’s long term growth prospects, cost of capital and return on capital employed.