Business valuation mandate in the context of an acquisition transaction
Business valuation mandate carried out on behalf of a Swiss industrial group as part of discussions concerning the possible acquisition of 100% of the share capital of a company active in the production and marketing of take-away cold coffees.
Mandate description
This mandate aimed to determine the fair economic value of the target company in the context of a transfer negotiation.
The evaluated company develops and distributes, under a brand recognized on the Swiss market, a range of refrigerated coffee-based drinks.
The main group, a historical partner of the target, wanted to have an independent and objective evaluation to frame strategic discussions with shareholders.
The intervention was also part of a logic Value arbitration, intended to confront the financial expectations of the parties and to support the position of the transferor in the transaction process.
The mission thus contributed to documenting and defending the economic coherence of the valuation selected in the context of exchanges with financial and industrial counterparties.
Key issues
The main challenges consisted of:
- appreciate the economic value of a brand with high potential in the ready-to-drink beverage market;
- measure the industrial and commercial synergies generated by potential vertical integration;
- insure a fair value arbitration between the interests of the seller and those of the purchaser;
- provide a solid and factual basis for discussion in an M&A process with high strategic sensitivity.
Approach and results
The valuation involved several approaches recognized by business valuation practitioners:
- the discounted cash flow method (DCF), making it possible to project the future performance of the target company according to several growth and synergy scenarios;
- The market multiple method, based on a sample of peers from the functional and dairy take-away drinks sector;
- and the practitioner's method, combining the return value and the substantial value from the restated financial statements.
The conclusions are allowed to establish a consistent and justified value interval, reconciling the company's financial fundamentals and post-acquisition development prospects.
The analysis also made it possible to defend the position of the purchaser against counterparties, by providing substantiated economic arguments and technical justification in accordance with professional valuation standards.
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.