COMPANY VALUATION
The business valuation service, allows you to know the estimated value to achieve the negotiation of your interest, be it sale, merger or purchase, define the participation to be acquired and mitigate risk situations.
Improve their understanding of the acquisition, adjust the valuation model, define the negotiation terms, and allow the structuring of the transaction and integration planning.
Company valuation service in Colombia
Our service includes the valuation of financial information, tax, regulatory and legal. In business valuation we include the valuation of wholesale or retail shareholdings of private or public companies for decision making in stock transactions, tax purposes, compliance with accounting and regulatory requirements.
What does business valuation consist of?
The business valuation service seeks to comprehensively review the value of the operation proposed by the applicant.
The risks of a company should be reviewed in a comprehensive manner as part of an adequate due diligence, such as legal, tax, shareholding or inheritance aspects, as well as rethinking their value by quantifying the aspects that cannot be visualized in a financial valuation.
Therefore, it is important that the company’s legal advisors, accountants, auditors and tax auditors can transmit the technical information plus the information that will allow enriching the criteria for making the decision on the operation.
Some of the operations in which it is necessary to perform a business valuation are:
- Inheritance proceedings
- Merger between companies
- Entry of a new partner
- Purchase of other companies
- Bankruptcy or liquidation of companies
- Capital reductions or increases
- Repurchase of shares from a partner
- Management’s interest in knowing the current value of its business
- Sale of the company or a percentage of the company to a third party
- Providing information to lending institutions for commercial loans
Note that the valuation methods are associated with the seller’s or buyer’s interest in determining the most relevant element or group of elements:
Valuation of assets:
- Valuation of assets, plant and equipment
- Property valuation
- Owner’s benefit
Capitalization of profit appreciation:
(Recommended for companies with few fixed assets)
- Owner’s reason for selling
- Length of time the company has been in business
- Period in which the current owner has owned the business
- Degree of risk
- Profitability
- Location
- Growth history
- Competition
- Barriers to market entry
- Future potential of the sector
- Customer base
- Technology
Market valuation:
- Sales study of similar businesses in your sector
In Colombia, the valuation of companies may contain the following information:
- Cultural knowledge of doing business in Colombia
- Macroeconomic impact on valuation
- Simple leveraged CAPM model
- Beta in valuation
- The EMBI (+)
- The size premium of a company
- Application of WACC
- Definition of application of valuation method
- Due diligence (legal, tax, environmental and labor aspects)
Finally, it is important to remember that the service may include accompaniment during the different phases, which are market research, due diligence, business start-up, contractual process and signing of the contract.
In addition, through the firms associated with BLITA International and TIAG Alliances we provide business valuation coverage in more than 120 countries.