At Maarschalk Valuations our valuations practice covers three main areas:
- Litigation support (e.g. reports to help resolve matrimonial and/or shareholder disputes);
- Corporate re-organisations (reports usually driven by tax and/or estate planning issues); and
- Transaction advisory work (reports to inform buy/sell agreements etc).
The skills and analytical work required for valuing businesses lend themselves very well to a range of other related advisory work, such as strategic planning and corporate financial planning. This work is provided through our Adastra Corporate Finance division (Other Services).
In fact, one of the side benefits for a business owner of having a valuation done is often the resulting discussion regarding such issues as working capital adequacy, redundant assets, normalization, and so on.
MVI’s skills also lend themselves to the provision of strategic level Contract CFO services (Other Services).
Litigation support usually requires the production of an objective and independent expert opinion report for use by the court. Paul has been qualified as an expert witness and appeared in the Supreme Court of British Columbia. He has also provided expert opinion reports at other levels of the legal process (e.g. arbitration).
Corporate re-organisations usually involve significant interaction with the accountants and tax advisers to the client. A valuation may provide guidance in the “purification” process needed to optimize the tax status of the company.
When planning a sale a valuation should be carried out for the seller as early in the process as possible to allow time to remedy weaknesses. Establishing the fair market value provides a benchmark from which an asking price can be developed. The fair market value will also identify balance sheet inefficiencies and provide guidance as to how working capital and fixed assets should be optimized ahead of a sale.
When planning an acquisition a business purchaser should, at the very least, seek guidance from a qualified valuator on the asking price.
Whether selling or buying a business, understanding the components of value allows for a meaningful negotiation.
All of our reports include the assumptions, rationale and calculations in support of our conclusions. A business valuation report can range from a limited critique to a complex and detailed valuation.
Business valuations, professionally done, not only establish the fair market value (see FMV defined) of the business but can help to identify areas of risk or weakness in a business.
Examples of the circumstances in which fair market valuation reports may be needed include:
- Disposal of a business, including a sale to management or children
- Acquisition of a new business
- Mergers
- Tax / Estate planning / Re-organisations
- Division of assets resulting from Family Law issues
- Asset impairment (for financial reporting)
- Capital raising or debt financing
- Shareholder agreements (buy in / buy out etc)
- Issue of shares to employees in terms of ESOP’s (Employee Share Ownership Plans)
- Shareholder dispute resolution
- Capital allocation / Investment decisions
- Restructuring
- Loss compensation
- Distinction between specific intangible assets and goodwill (for financial reporting)