Business Valuation Mandate in a Tourism Group Restructuring Context
Independent valuation of a tourism group conducted ahead of a recovery plan and capital reorganisation
Mandate Description
The mandate consisted of a business valuation carried out on behalf of a French tourism group facing a fragile financial situation.
The objective of the assignment was to determine the real economic value of the company prior to the implementation of a comprehensive recovery and capital reorganisation plan.
The company, which benefits from a long-standing reputation in the organised travel market, was operating in a complex sector environment characterised by declining demand and increasing operating costs.
The valuation formed part of a broader strategic support process conducted ahead of new financing initiatives and the renegotiation of existing debt.
Key Issues
The main challenges of the mandate were to assess the residual economic value of a group in financial difficulty while integrating realistic prospects for operational recovery.
A key objective was to evaluate the sustainability of the economic model in a post-crisis environment.
The valuation also required distinguishing operating value from the asset value of fixed assets and intangible assets.
Approach and Results
The valuation relied on several complementary approaches.
- A performance-based approach was applied, based on adjusted and normalised profitability.
- A transaction multiples approach was also used, drawing on a panel of comparable companies in the tourism and leisure sector.
- In addition, a discounted cash flow approach was implemented, incorporating a cautious recovery scenario over a three-year horizon.
The analysis resulted in a prudent economic valuation range, which served as a reference for discussions with creditors and potential investors.
The conclusions also supported discussions related to capital restructuring and the valuation of equity interests held in subsidiaries.
This assignment represented the first step in a broader support programme, which also included the valuation of financial instruments and the group’s brand.
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.