Business Valuation Mandate in a Brand Transfer Context

Mandate Description

The objective of the mandate was to determine the fair economic value of the target company in the context of a transfer negotiation.

The company develops and distributes, under a brand recognised on the Swiss market, a range of refrigerated coffee-based ready-to-drink beverages.

The acquiring group, a long-standing partner of the target, sought an independent and objective valuation in order to frame strategic discussions with the shareholders.

The assignment was also part of a value arbitration process aimed at confronting the financial expectations of the parties and supporting the position of the seller throughout the transaction.

The mandate therefore contributed to documenting and defending the economic consistency of the selected valuation in discussions with financial and industrial counterparties.

Key Issues

The main challenges of the mandate were to assess the economic value of a brand with strong growth potential in the ready-to-drink beverage market.

A key objective was to measure the industrial and commercial synergies arising from a potential vertical integration.

The valuation also needed to ensure fair value arbitration between the interests of the seller and those of the buyer.

Finally, the assignment aimed to provide a solid and fact-based foundation for discussions within a highly strategic and sensitive M&A process.

Approach and Results

The valuation relied on several approaches commonly used by business valuation practitioners.

• A discounted cash flow method was applied to project the future performance of the target company under various growth and synergy scenarios.
• A market multiple approach was also used, based on a panel of comparable companies active in the functional beverages and dairy-based ready-to-drink segments.
• In addition, the practitioners’ method was implemented, combining earnings-based value and substantial value derived from restated financial statements.

The analysis resulted in a coherent and well-supported valuation range, reconciling the company’s financial fundamentals with its post-acquisition development prospects.

The valuation also enabled the buyer’s position to be supported in discussions with counterparties by providing substantiated economic arguments and technical justification in line with professional valuation standards.