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Documenti di Cultura
Valuation of A Business
Lender
Compliance
and Financial
purposes
Tax and
Regulatory Buyout / Exit
Asset / Dispute
Valuation Valuations
Valuation
Entry
valuation FMV
Valuations
FMV Valuations
and Pre deal PPA PPA
for Management /
Board Portfolio
Consideration Valuation
For Merger
and
Demerger
12/29/2018 Valuation – an MS
integral part of the deal
222 MACR 44
M&A – Valuation General Proposition
• In a merger / demerger valuation, attempt is not to arrive at absolute values
of the shares of the companies, but their relative values, on a stand
alone and as is where is basis, to arrive at the exchange /
entitlement ratio.
• In a merger and demerger wherein the economic and voting interest of the
shareholders remains the same (pre and post demerger), commercially
no valuation is required.
• Principles of valuation
‒Business value vs Asset value "Price is what you pay. Value is what you get."
‒ Business value more than assets - Warren Buffett
‒ Absolute value vs Relative value
‒ Value hovers within a range not a Seller‟s subjective value line
precise number
Value
‒ Valuation v/s price
Area in which
a market exists
Premium for
Context
control,
efficiency and
synergy Timing Basis
Premise
Asset Earning Market
Method Method Method
12/29/2018 MS 222 MACR 78
Where is the value
What underpins the cash flows of this business - fixed assets, people (or
one person), know-how ?
People business
Asset business
Brands
Revenues
Earnings
Time
• Market Price
• Comparable Companies Multiples
2. Merger
• Synergies
• Premium / Discount