Business valuation
Valuation of an asset before a transaction
Crisis is the time of merges and acquisitions. When external factors force to sell a business its assets impair and sometimes do that significantly. Companies with a stable financial position and available funds are fast to acquire entities that have fallen in value. However the possibility to acquire assets with a significant discount during a crisis can bring more risks than during more stable times due to, primarily, uncertainty as to the further developments.
In the circumstances which are frequently worsened by lack of transparency and faith to each other from counterparties, the best investment decision whether to buy or sell a business requires a professional assessment of the financial position of the acquired company.
When measuring value of a business FinExpertiza independent appraisers will carry out a thorough analysis of the industry where the business operates and prepare a Valuation Report in strict compliance with the federal laws and regulations. You can also obtain any required consultations, breakdowns of calculations and reasoned conclusions.
A complex support of the client includes presence of our professionals at negotiations, if required.
Rationale of transaction price for inspection and supervisory authorities
Applying for independent appraisers makes sense even when no Valuation Report is required but the internal procedures recommend taking action aimed at mitigating risks and at supporting the market nature of the transactions. This support can also be required for tax bodies. A Report as prepared by our professionals will help display an effect of external factors on the company's value during the crisis and give evidence of that effect to inspection authorities.
Performing internal procedures for an additional issue
During the crisis many companies anyway face investment resource problems. An additional issue with subsequent repurchase by the government can be a solution to the equity deficit for investment programmes in companies within a government corporation. Our experts have vast experience in supporting this procedure which ensures prompt agreements at each level.
Project financing and business collateral
Another way to increase equity for financing both operational and perspective investing programmes is external borrowings including banking loans. A banking loan generally requires pledging its assets or a part of share capital as collateral to the bank. During the economic crisis, adequate valuation of collateral becomes still more important.
Finding out a fair balance between the value of the collateral and the amount of the loan is equally important for the both parties to the transaction. And this can be done by an independent appraiser who will prepare a report on the real value of the assets to be pledged and indicate, if needed, their residual value (based on the liquidity values of the property taking into consideration the necessity of the sale and shorter exposition period).
We ensure optimal timing for agreement procedures due to our vast experience of cooperation with banks.
