Tag: Valuation
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Valuing a new project is NOT the same as valuing an existing business.And honestly… it shouldn’t be treated the same.
When we value an existing company, we have real evidence:📌 Actual performance📌 Actual margins📌 Actual customer behavior📌 Actual industry benchmarks But when we value a new project?We walk into a room full of assumptions. Verified assumptions, yes — but still assumptions. And assumptions do one dangerous thing:They love to look more beautiful than reality. That’s…
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Keyman Risk – Real situation from one of our ongoing engagements.
We were hired to do a business valuation for a family business. Operations are running. Financials are provided. Everything looks “normal” on the surface. Until we reached the Q&A stage. Q: “Please break down ‘Other income’ in the P&L.” A: “Interest income and selling of scraps.” Q: “What determines the profit margin differences between products…
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Before investing, know what you’re really buying. : A real case we handled recently
Mr. A was considering investing in Company B.He knows the industry well — high margin, not easy for new players to enter — so becoming a shareholder felt like a good first step into the business. He reached out to us for a valuation. During our review, we interviewed Company B’s management together with Mr.…
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Sharing Info With a Potential Competitor in M&A — Should You Be Worried?
Our client is planning to sell xx% of its shares to a new strategic investor. One potential buyer showed strong interest. During the NDA stage (Non Disclosure Agreement where each party sign an agreement to not disclose any confidential information of each other) it was discovered that this same company had already acquired over 50%…
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During a recent M&A negotiation, a client came across the term “Earnout Payments.”
In simple terms, an earnout is when a buyer pays part of the purchase price upfront (XXX) — and agrees to pay an additional amount (YYY) later only if the acquired company meets certain performance targets.These targets are often tied to EBITDA, revenue, or gross profit or Non-financial milestones — e.g. achieving a regulatory approval,…
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Does all the debt need to be paid off when a company is being acquired?Short answer: No.
Whether the debt must be cleared before the transaction depends entirely on the deal structure and what both the buyer and seller agree to. There are usually two common scenarios: 1️⃣ The buyer purchases the company debt-freeIn this case, the seller must clear all the debt before the transfer of shares. The purchase price is…
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Why do we always ask for your company’s asset details when we do a business valuation?
Because revenue and profit don’t tell the whole story. When we value a business using DCF (Discounted Cashflow), we need to understand what the company has invested in before, how the assets are depreciating, and what future investments are coming. Are there machines that need to be replaced soon?Is there an investment cycle?Is the factory…
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What is a “Terminal Value”?
If you’ve ever read a business valuation report and saw the term Terminal Value, it simply means this: When we value a company, we normally forecast around 5 years into the future.But companies don’t stop operating after year 5. So instead of forecasting forever, we estimate the value of the business after the forecast period,…
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Thinking of buying or selling a business?
Here’s the simple version of how an M&A deal actually works. A lot of people think it’s just “meet → agree price → sign the contract.”But in reality, there’s a proper flow — 1️⃣ NDABefore sharing any sensitive info, both sides sign an NDA.Meaning: “You’ll see my secrets. Please don’t share them.” 2️⃣ MOU /…
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It’s beginning to look a lot like Christmas 🎄Peak season is coming… and for many businesses, sales are about to shoot up.
This is why, when we do a business valuation, we always ask for year-to-date performance (internal numbers are perfectly fine) and at least 3 years of historical data. Because not every business behaves the same throughout the year. Some are seasonal — Christmas, Chinese New Year, school terms, tourism periods, you name it. Some have…
ORNA Company Limited 