Every company needs to value its business for internal strategy decisions, corporate governance, regulatory compliance and other internal and external factors. A business is an ever-growing entity and goes through various stages throughout its lifecycle. The valuation of the business is one of the most important parameters to decide its direction and future progress. Some relevant stages where determining the fair business value of a business is required are: securing PE / VC / Angel Funding, evaluating Joint Ventures, undertaking Mergers and Acquisitions, raising FDI / Non-resident funding, financing through debt instruments, issuing ESOPs, shareholder exit / dispute over share price, succession planning and in case of international arbitration.
A company’s value is typically determined using standardized valuation tools and methodologies. We undertake valuations using several techniques to develop a range of valuations and explain the potential impact of alternative methodologies and structures on the transactions. A business may require:
Validating financial projections is a key component before starting any valuation exercise – It requires thorough scrutiny of financial model inputs and results. The purpose of validating is to ensure reasonableness of key financial variables, stability of financial results, matching financial results with expectations and so on. It is valuable in assessment of synergies at the operational level, to evaluate impact of negotiated deals and in altering implementation conditions.
Our team is proficient enough in validating financial projections to ensure consistency and set a strong foundation for decision making by senior management. We undertake extensive industry research to establish strong assumptions for financial projections and guiding the clients as to the reasonability of any assumption. We also conduct competitor benchmarking and analysis to develop in-depth understanding of their business models, product segments and financials. We provide a range of valuations along with sensitivity analysis through a comprehensive financial model.
At Nucleus Partners, we recognize that valuation is not a simple number crunching exercise. In fact, it is becoming complex due to the regular changes in the regulatory and business environment. We spend significant time to understand the business dynamics and its key value drivers. We draw on our extensive experience and apply relevant valuation methodologies and combine this with our deep sector knowledge and benchmarking analysis to offer value-added advice.
We make it “our priority” to work with the management to understand the key business dynamics and most importantly the key value drivers to derive real business value. One needs expert to conduct the best and most appropriate valuation of its business. A typical business valuation exercise requires historical financials and projections to serve as input for the development of high level financial models.