🚩 When “high revenue” isn’t enough: a real case we just handled

A client came to us with a tempting deal.

They inherited a piece of land.
A target company—high revenue, high barriers to entry—wanted to use that land as collateral to borrow more money from a bank.
In return? Shares in the company.

At first glance, it looked exciting.
We received audited financials, internal statements, and spoke with management several times.
Revenue generation was solid. Demand was real. The business model worked.

But there was one problem.

📉 The company had liquidity issues caused by… management.
And the target company told our client clearly:

👉 “You will NOT have management control.
👉 But don’t worry, we will give dividends.”

That was the biggest red flag of all.

Because once the land is used as collateral, and the money goes into their hands, there is no guarantee dividends will ever be paid.
And if the business continues to be mismanaged, the inherited land could disappear entirely if the company cannot repay the bank.

We completed the valuation.
The share value was high—exactly as expected.

But our recommendation?

It was a high-risk investment with limited protection.
The upside didn’t justify the potential loss of a family asset.
Not worth it.

The client walked away.
And sometimes, that’s the best outcome.

Valuation isn’t just about numbers.
It’s about protecting clients from deals that look good on the surface but collapse under pressure.

#ORNA #DCF #Investment #Consult BusinessValuation