Sale of Swiss flexible packaging companies Elag Verpackungen AG and Elsaesser Verpackungen AG to Ampac, USA
Role of Proventis Partners AG, Zurich: Exclusive financial advisor to the owner throughout the sales process
Sale of proofreading, adaptation and translation company WIENERS + WIENERS GmbH to Caldec Beteiligungen GmbH
Role of Hartmann Zillmer Corporate Finance, Hamburg: Exclusive advisor to the owners throughout the sales process
Acquisition of Medical Biomaterial Products GmbH by a family holding through a Management Buy-In
Role of Hartmann Zillmer Corporate Finance, Hamburg: Advisor throughout the acquisition process and realization of acquisition financing for the buyers
Private Investors acquire 100% of the shares of medi-cine medienproduktions GmbH from CompuGroup Holding GmbH
Role of von Proventis Partners Munich: Exclusive buy-side advisor in the acquisition process
Reviva AG acquires the majority of the shares of the Swiss tradition company Faude & Huguenin AG Medals and coins
Role of Proventis Partners Zurich: Exclusive sell-side advisor and support of restructuring in the Board of Directors
Valuation – How do you calculate a company's or an asset's value?
How does company valuation work?
Proventis Partners regularly values companies and assets within the scope of M&A transactions. Further reasons for a valuation might be the a going public (IPO), the retirement of a partner (ESOP) or the calculation of exchange relations within the scope of mergers.
The valuation methods deployed in the field and approved by e.g. the IDW (Institute of German Financial Auditors) are the Discounted Cash Flow method (DCF) and the Multiple method. Apart from that, Proventis Partners uses the Real Option approach. We use simulations such as the so-called Monte Carlo simulation to justify exceptions based on mathematic calculations.
Your added value
A realistic and professional company valuation will significantly strengthen your negotiation position as a buyer or seller and will support you in achieving a fair purchase price. The Proventis Partners valuation and analysis is based on state-of-the-art methods. Access to up-to-date research data along with the experience gathered from many transactions will support in retrieving a realistic company value. Furthermore, Proventis Partners will compile a rating indication applying all the common methods for you using up-to-date software tools and will show approaches for optimising your credit rating. This will provide you access to the debt capital market.
Example: Using the multiple method
1. Identifying comparable
2. Ascertaining multiples
3. Calculating the company value
4. Calculating equity capital
Looking for comparable companies which are similar to the target company in terms of:
Company size
Industry
Stage
Checking on the availability of company data which can be used to calculate multiples
Deduction of Multiples from the respective reference figure (turnover, EBITDA, EBIT and/or annual surplus) related to the company value Multiples can be deduced from the data of listed companies (so-called peer groups) and the data from recent M&A transactions. Corrections in terms of size, shares, etc. are not considered in this example.
The company value is calculated from the respective Multiple, multiplied with the reference value (turnover, EBITDA, EBIT and/or annual surplus).
In order to calculate the purchase price for the equity capital shares the net debts (NVF) are deducted. Net debts are the interest bearing debts on the liabilities side (e.g. bank credits), minus the liquid assets (cash assets, cheques or assets stored on banks).
Compiling data from comparable companies
For this, the company value and EBIT are ascertained.
The Multiple of the individual comparable companies is calculated by relating the EBIT to the company value (company value / EBIT).
In order to get a total Multiple the individual Multiples are used to calculate the Median from.
The EBIT Multiple (4.5 in this example) calculated from the comparable Multiples is multiplied with the EBIT from your own company.
For calculating the equity share value or the purchase price, respectively, the NFV (interest bearing debts minus liquid assets) need to be deducted; the NFV in this example are 2.75. The equity capital value is now calculated as follows:
U1: 1.0 EBIT and 4 U value
U2: 2.0 EBIT and 10 U value
U3: 1.5 EBIT and 6 U value
U4: 5.0 EBIT and 25 U value
U1 EBIT-Multiple: 4.0
U2 EBIT-Multiple: 5.0
U3 EBIT-Multiple: 4.0
U4 EBIT Multiple: 5.0
Own EBIT: 3.5m
Multiple: 4.5
Bank credit: 3m
Cash: 0.25m
NFV: 2.75m
Median EBIT Multiple: 4,5
Company value: 15.75m
Equity capital value: 13m
Compiling data from comparable companies
For this, the company value and EBIT are ascertained.
The Multiple of the individual comparable companies is calculated by relating the EBIT to the company value (company value / EBIT).
In order to get a total Multiple the individual Multiples are used to calculate the Median from.
The EBIT Multiple (4.5 in this example) calculated from the comparable Multiples is multiplied with the EBIT from your own company.
For calculating the equity share value or the purchase price, respectively, the NFV (interest bearing debts minus liquid assets) need to be deducted; the NFV in this example are 2.75.
The equity capital value is now calculated as follows:
