Valuation

Valuation

Valuation processes and financial modelling, as well as other related techniques, have increasingly become a fundamental element in the business context and an essential condition for the sustainability and development of companies and businesses.

In fact, the increasing pace of change, more demanding and professional markets and the uncertainty of the context in which companies operate in an increasingly connected and global economy require financial planning for business activities, regardless of the company’s stage of development (whether at the creation/conception of the business/company or, possibly at a later stage, internationalisation).

At Moneris, we have assembled an experienced team specialised in valuation and financial modelling processes.

Our experience in contexts as diverse as (re)privatisation processes, company and business valuation, project finance and financial modelling, brand valuation, intangible asset valuation for assessing impairments, among others, allows us to deploy a team of professionals who are suitably specialised in each area in order to meet our customers’ needs.

Our knowledge and dedication, combined with the specialisation of our teams and the way we interact with our clients during the valuation process, is the key to the excellence and success of our work in this area.

Services under the Valuation

Company and business valuations

  • Divestment (total or partial sale of the company or business);
  • Investment (total or partial acquisition of the company or business);
  • Buy out by shareholders, partners or management (MBO).
  • Financing and credit risk;
  • Litigation and arbitration proceedings;
  • Negotiation (scenarios and sensitivity analyses);
  • Family succession.

Impairment tests

  • Review of goodwill impairment;
  • Review of impairment of other intangible assets;
  • Cash-generating units.

Financial modeling

  • Business plans (preparation, risk analysis, market analysis and financial projections);
  • Competition (benchmarking);
  • Strategy (simulation for assessing strategic options);
  • Investment (optimisation in capital allocation);
  • Growth (business expansion and strategies);
  • Viability (restructuring processes and debt renegotiation).

About Valuations

The valuation of companies and businesses is the process used to determine the value of a particular entity, whether commercial, industrial, services or investment, which aims to exercise an economic activity.

The valuation may have different scopes and extensions, for example, the global valuation of the company, the valuation of the total equity, the valuation of a majority stake, the valuation of a minority stake, the valuation of a business unit, or the valuation of a set of assets and liabilities.

As far as the objectives are concerned, the valuation may be carried out to provide the basis for:

  • The sale/purchase of all or part of the share capital;
  • Merger/spin-off operations;
  • Impairment testing of goodwill (for accounting purposes);
  • Impairment testing of goodwill (for accounting purposes);
  • among others.

Each case requires a different approach and in-depth knowledge of the valuation techniques and methods to be used.

We typically use 3 main approaches to a valuation

Asset Valuation

The assets and liabilities of the entity are evaluated individually, including those not accounted for (contingent assets and liabilities), using a certain valuation criterion for each of them. Several criteria can be used in this valuation approach, namely liquidation value, book value, replacement value and fair market value.


Comparative market-based valuation

In this valuation approach, also known as relative or multiples valuation, comparable companies that are listed or have recently traded are used as a basis for comparison, using the listed prices or transaction prices for the company or business being valued.


Valuation on the basis of updated income

In this valuation approach, the value of the company is considered to depend on the future income it may generate, which is updated at the time the valuation is made. Several methods may be used, namely:
Updating of dividends (generally used to value minority shareholdings);
Updating of cash flows (future cash flows are estimated and discounted to cost of capital).

About Financial Modelling

Building an effective business model, whether for evaluating a transaction, a new market opportunity or for other strategic purposes, is a complex and difficult task.

In our view, business plans and financial modelling should be at the core of the decision-making process, whether evaluating strategic options, new investments or existing operations.

In our view, business plans and financial modelling should be at the core of the decision-making process, whether evaluating strategic options, new investments or existing operations.

Our professionals provide modelling solutions adapted to different purposes, whether for the development of critical corporate activities, such as M&A activities, joint ventures and divestitures, or the financial planning of your business, including the preparation and analysis of new opportunities, cost allocation to different business segments or internal reorganisation.

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