Business Valuation Mandate for a Swiss Family-Owned Company

Mandate Description

The mandate consisted of a valuation assignment carried out on behalf of a Swiss family-owned company specialised in the distribution and installation of sanitary, heating and ventilation equipment.

The assignment was initiated following a generational transition, with the new management seeking an objective and independent valuation prior to considering a potential sale of the company.

The primary objective was to determine the fair economic value of the company’s equity within a methodological framework compliant with Swiss and international valuation standards.

Key Issues

The main challenges of the mandate were to assess the true value of a locally anchored family-owned business with recognised technical expertise.

A key objective was to identify the main performance drivers in a market characterised by rising production costs and increasing sector concentration.

The valuation also needed to ensure consistency between the financial valuation, the balance sheet structure and the company’s future growth prospects.

Approach and Results

The valuation relied on a set of complementary approaches.

• A substantial value approach was applied to measure the adjusted net value of the company’s economic assets.
• A performance-based approach was used, based on the capitalisation of average operating profitability over the last three financial years.
• The practitioners’ method was also implemented, combining performance-based value and substantial value.
• In addition, a transaction multiples approach was applied, drawing on a panel of comparable transactions in the construction and building services sector.
• A discounted cash flow approach was used, incorporating prudent assumptions regarding business development and profitability.

The analysis resulted in a robust valuation range reflecting the company’s financial fundamentals, asset structure and competitive positioning.

The valuation highlighted a solid business with a loyal customer base and a well-established technical reputation in the French-speaking Swiss market.

This valuation served as a strategic reference for preparing the transfer process and defining negotiation conditions, ensuring a rational and well-documented approach to value.