Mergers and Acquisitions > Valuation services

The Valuation service aims to assess the fair value of a company, and consists of issuing a Valuation Report based on different methodologies, among which we select the most appropriate one to estimate the value of the business. The most common methods are:

  • Valuation by the Discounted Cash Flow (DCF): This method estimates the value of the company based on its future cash generation obtained by the use of its tangible and intangible operational assets, discounted by a rate that represents the company’s intrinsic cost of capital; method estimates the value of the company based on its future cash generation obtained by the total of its tangible and intangible operational assets, discounted by a tax that represents the intrinsic capital cost of the company.
  • Valuation by Multiples of Publicly Traded Companies: The evaluation is based on the arithmetic mean of multiples of Net Revenue, EBITDA, Net profit and other metrics of publicly traded companies that operate in the same industry segment;
  • Valuation by Multiples of Precedent Transactions: The evaluation is based on the arithmetic mean of multiples of Net Revenue and EBITDA observed in precedent transactions in the same industry of the evaluated company;
  • Accounting book value: The value of the company is determined based on the value of Net Equity as shown in the accounting balance of the closest date to the preparation of the Report;
  • Evaluation by the Weighted-Average of the Historical Share Price: The value of the company is determined based on the weighted-average of the historical share price of publicly traded companies.

The most used methodology among the presented above is the Discounted Cash Flow Method. As this method is the only one that captures profit growth perspectives, it ensures flexibility when measuring opportunities and competitive advantages, aside from reflecting the expected return due to the risks for the business, the industry and the country.

Situations that requires company valuation

Several events influence the need to provide Company Valuation Reports by its shareholders. Among the most common, we list the demands for which Camaya Partners offers diverse solutions to its clients:

  • Enterprise Value identification in M&A situations;
  • Legal disputes among shareholders through the comparison of Evaluation Reports;
  • Corporate Reorganizations;
  • Preparation of a report for the use of Goodwill as an expectation of future profitability;
  • Impairment test;
  • Market Value of Net Equity;
  • Valuation of post-merger Company or Joint-Ventures.

We offer a wide range of customized solutions regarding Business Valuation Reports:

  • Company Valuation Report;
  • Analysis of key aspects of value creation;
  • Sensitivity analysis and financial risks assessment;
  • Synergies analysis in M&A situations;
  • Financial modeling review;
  • Fair Value Opinion Report (Fairness Opinion);
  • Measurement of the company’s cost of capital;
  • Advanced financial modeling;
  • Market, price and margins analysis.

Types of Valuation Reports

Camaya Partners offers two types of valuation reports:

Valuation - Camaya Partners
Valuation - Camaya Partners

Advanced Valuation techniques applied to M&A negotiations

The Valuation services can be leveraged when employed along with our M&A advisory services. When we are engaged in the advisory for the sale or acquisition of a company, we devote considerable time to understanding and negotiating the difference between the offered price and the market value, by objectively negotiating the fair value of the asset, which may be far above or below what the company is really worth. This way, our contribution involves the following aspects:

  • Evaluation of the impact of disconnected interests caused by natural biases on the company’s Valuation;
  • Identification of methodological inconsistencies in the Valuation models;
  • Analysis of positive and negative scenarios in complex Cash Flow Modeling decisions;
  • Review of the evaluated business’ market parameters, cash flow, cost of capital and operating margins;
  • Implementation of due diligence results in Valuation;
  • Analysis of return rates required by investors based on systematic risk components;
  • Value sensitivity analysis based on changes in key components of value generation.
Valuation - Camaya Partners
Valuation - Camaya Partners

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