We work for acquirers and their advisers to test the target's earnings, the assumptions in the seller's information and the structure of the proposed deal. We do not replace financial or legal due diligence; we focus on value.
When is this valuation required?
- Before making an indicative offer or signing heads of terms.
- When the seller's asking price relies on forecasts or adjusted earnings you want tested.
- When financing the deal requires an independent view of value.
- When the deal involves deferred consideration, an earn-out or rollover equity.
- When the board or investors want independent support for the price.
Who instructs us?
- Trade buyers and corporate acquirers
- Management teams and investors
- Corporate finance advisers and corporate solicitors acting for buyers
What exactly is valued?
We value the target on a standalone basis and, where relevant, separately estimate the value of expected synergies. Keeping the two apart matters: paying the seller for synergies that only you can deliver transfers that value to them.
How is value assessed?
We examine the quality of the target's earnings, test normalisation adjustments, and stress-test forecasts against historic performance and market conditions. Discounted cash flow analysis helps show how value depends on specific assumptions such as growth, margins and capital expenditure, and earnings multiples provide a market cross-check.
We then consider how the proposed price is structured: the split between cash at completion and deferred or contingent amounts, the treatment of debt and working capital, and any equity retained by the sellers.
How the approaches are usually weighed
Typical
- IncomeDiscounted cash flow and quality of earningsUsual starting point
- MarketEarnings multiplesCross-check
- AssetAdjusted net assetsWhere relevant
What factors influence the result?
- Earnings quality
- Whether reported profits are sustainable and supported by cash.
- Forecast credibility
- How forecasts compare with past delivery, pipeline and market data.
- Customer and key-person risk
- Concentration and dependence on people who may leave after completion.
- Integration and synergies
- Value that depends on your actions rather than on the target alone.
- Capital needs
- Investment required to maintain or grow the business after acquisition.
- Consideration structure
- The real cost of deferred, contingent and equity-based consideration.
What information is required?
- The seller's information memorandum or financial pack
- Historic accounts and management accounts
- Forecasts and the assumptions behind them
- Draft heads of terms or the proposed deal structure
- Due diligence findings where available
We send a tailored information request once the scope is agreed.
What report will you receive?
We report a standalone value range, a separate view of synergies where requested, and the sensitivities that matter most to the price. If the valuation supports a board or investment committee decision, we prepare it in a form suitable for that audience.
See types of business valuation reports for how the scope of each type differs.
Timing and cost
How long will it take?
Acquisitions often run to tight timetables. Tell us the key dates and we will agree a scope that fits them, focusing first on the issues that most affect value.
How much does it cost?
Fees depend on the size of the target, the information available and the depth of analysis required. We agree the fee and scope in writing before starting.
How our fees are set →Frequently asked questions
Is this the same as financial due diligence?
No. Due diligence investigates the target's accounts, tax and liabilities. A buy-side valuation uses that information to assess what the business is worth. The two are complementary.
Should synergies be reflected in the price?
That is a negotiating decision. We value synergies separately so you can see how much of your own expected benefit you would be paying away.
Can you value a business from limited information?
We can provide an initial view at an early stage, clearly limited to the information available, and refine it as more data becomes available during the deal.
How do you treat the seller's add-backs?
We test each one against the evidence and show the value with and without the adjustments we consider unsupported.
Can you help with a management buyout?
Yes. We can provide an independent view of value for management, investors or the selling shareholders in an MBO.