Business Valuation Mandate for a Construction Sector Carve-Out
Independent valuation of a construction company conducted ahead of a carve-out and future M&A process
Mandate Description
The mandate consisted of a business valuation assignment carried out for a long-established construction company operating in French-speaking Switzerland, active for several decades in the delivery of real estate developments, infrastructure projects and technical buildings.
The assignment was conducted in the context of a carve-out, prior to a merger and acquisition process implemented at a later stage.
This independent valuation made it possible to determine the economic value of the company, document key financial indicators and prepare the technical elements required for the forthcoming transfer transaction.
Key Issues
The main challenges of the mandate were to analyse the operational performance of a company with relatively low capital intensity.
A key objective was to identify structural profitability drivers in a sector exposed to real estate market cyclicality.
The valuation also aimed to anticipate valuation issues likely to influence future negotiations, including contractual structures, project exposure and margin profiles by business segment.
Approach and Results
The valuation relied on several recognised approaches.
- A discounted cash flow approach was applied to assess future cash flow generation.
- A relative valuation approach was also used, based on EBITDA multiples observed in the construction sector, generally ranging between five and seven times EBITDA depending on company size and risk profile.
- In addition, a return value approach was implemented, based on adjusted average EBITDA and EBIT over the last three financial years.
The analysis resulted in a valuation range consistent with market practices, integrating economic outlook, cyclical constraints and the operational specificities of the group.
The valuation served as a technical and strategic reference during preliminary discussions between shareholders and potential partners and helped anticipate key transaction challenges.
Conducted independently and separately from the subsequent transfer process, the assignment contributed to securing shareholders’ reflections on the value of their business and structuring the preparation of the future M&A mandate.
The transactions shown include those completed by, or with the involvement of, Hectelion team members in current or previous professional roles. They are presented for illustrative purposes only and do not imply exclusive responsibility by Hectelion.
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The transactions presented were carried out by, with the contribution of, or with the participation of members of the Hectelion team in the context of functions performed currently or previously.