Mergers & Acquisitions (M&A) Valuation Methodologies I
Valuations are undertaken to determine how much an asset or company is worth and are conducted for a number of purposes: acquisitions, sales (including IPOs), joint ventures, liquidations, for taxation and financial reporting. Knowing the valuation’s purpose, whose perspective it is being conducted from and its premise (e.g. is the company a going concern, is it for liquidation or fire sale) is key. Introducing the ‘market valuations’ and ‘comparable company trading multiples’ valuation methods.
Key learning objectives:
What are valuations used for and how to approach them?
Explain the ‘market valuations’ methodology and which companies it is best suited to
Explain the ‘comparable company trading multiples’ method, its applications, pros and cons?
