Business and Real Estate Valuation Mandate for Corporate Restructuring

Mandate Description

The mandate consisted of a valuation assignment carried out on behalf of a Swiss company operating a network of car washes and owning the real estate assets used for its operations.

The objective of the assignment was to determine the fair economic value of the company’s equity while unbundling the value of the real estate assets from that of the operating business, with a view to restructuring and optimising the holding structure.

The valuation aimed to clarify the true profitability of the operating activities independently of real estate ownership, while defining a target structure better suited to the company’s future governance and financing strategy.

Key Issues

The main challenges of the mandate were to distinguish the operating value of the service activity from the patrimonial value of the real estate assets.

A key objective was to measure intrinsic operational performance without distortions linked to property ownership.

The assignment also aimed to propose a capital restructuring separating real estate and operating entities through an internal spin-off.

Finally, it was essential to ensure consistency between the economic valuation and consolidated cash flow generation.

Approach and Results

The valuation relied on several complementary approaches.

• A substantial value approach was applied to assess the adjusted net value of the real estate assets.
• A performance-based approach was used to value the recurring operating activity.
• The practitioners’ method was also applied, combining the performance-based approach and the substantial value approach.
• In addition, a transaction multiples approach was implemented based on comparables in the automotive services and industrial cleaning sectors.
• A discounted cash flow approach was used to assess the future profitability of the isolated operating perimeter.

The analysis resulted in a differentiated valuation framework, distinguishing the value of the operating business based on cash flow generation from the patrimonial value of the real estate assets assessed using an adjusted asset-based approach.

The valuation served as the basis for an internal restructuring of the company, leading to a legal and financial separation of the two divisions.

This approach clarified responsibilities, improved performance transparency and strengthened the company’s financing capacity for each activity.