A Dealbridge, vai realizar o Meeting de 2024 em Portugal!

A Dealbridge, vai realizar o Meeting de 2024 em Portugal!

Estamos entusiasmados em anunciar o nosso próximo Meeting, que terá lugar nos dias 9 e 10 de Maio na cidade do Porto. Esta é uma oportunidade única para reunir os membros da nossa rede global e explorar oportunidades de transações Crossborder.

Durante dois dias intensivos de networking e aprendizagem, vamos mergulhar fundo no tema das transações crossborder. Com representantes dos 11 países onde a Dealbridge está presente, teremos uma visão abrangente das melhores práticas, desafios e oportunidades únicas que surgem ao negociar além fronteiras.

Contará com a presença de Painéis Especializados; destacamos a presença de Fundos de Capital de Risco e Private Equity, tal como a HCapital partners, que irão apresentar e fomentar a discussão sobre temas de estratégias de internacionalização das suas participadas e de potenciais transações crossborder.

Teremos ainda a presença da marca internacional espanhola GOIKO que apresentará a sua estratégia de entrada em alguns dos países onde a Dealbridge está presente. A Dealbridge será assim desafiada a apoiar a estratégia de criação de Joint Ventures entre grupos de restauração e o Grupo GOIKO, em cada um dos países a apostar.

Iremos receber um especialista da INVEN.AI, uma plataforma inteligente de dados de empresas que utiliza os mais recentes modelos de IA e PNL para analisar milhões de Websites e extrair dados comerciais relevantes. Uma ferramenta que será, sem dúvida, bastante interessante para a rede Dealbridge.

Terminaremos com Sessões de Brainstorming entre as várias equipas dos 11 países, fomentando a valiosa troca de ideias e a criação de oportunidades de colaboração futura.

Overview of the 3 most common approaches to value mid-market companies

Overview of the 3 most common approaches to value mid-market companies

Price is the paramount issue in any M&A transaction. Beyond anything else, it determines the amount of value that is transferred from the buyer in exchange for ownership of the company. While there are several established methods to estimate the price range of a company, M&A professionals gravitate toward the following methods for valuing businesses:

Income Approach – Discounted Cashflow Valuation

Among many investment bankers, M&A consultants, university professors and other financial professionals, the Discounted Cash Flow (DCF) analysis is considered as the gold standard of business valuation. A DCF analysis is a very flexible and accurate way to evaluate a project, division or entire companies.
Any DCF analysis, however, is only as accurate as the assumptions and forecasts it relies on. Errors in estimating key factors such as a company’s growth rate or its weighted average cost of capital can lead to a distorted picture of a company´s fair value.


Market Approach – Multiples

The market approach is one of the most common approaches to value a company, especially in the mid-market. It is based on the premise that a rational investor will not pay a higher amount for a company than he would pay for a company with similar characteristics and utilities. As a result, application of the market approach usually includes the use of multiples (e.g. revenue, EBIT, EBITDA), calculated for comparable companies that are listed on stock markets or that have recently been sold/acquired.
Among M&A professionals, multiples are already an accepted tool. Almost 85% of equity research reports and more than 50% of all acquisition valuations are based on multiples. This approach is frequently used to translate the results of a DCF analysis into intuitive figures, in combination with those acknowledged methods to back them up or as an alternative to estimate the value of a company in an easier and faster way.


Asset Approach

The asset approach is a valuation technique where the equity value of a business is determined by subtracting the market value of the liabilities from the market value of the total assets. There is some room for interpretation in terms of deciding which of the company’s assets and liabilities to include in the valuation and how to measure the fair market value of each.
This method is mostly used in case of a holding company, when losses are continually generated, or when valuation methodologies based on a DCF or multiples indicate a value lower than its net asset value.

Overview of the 3 most common approaches to value mid-market companies

Final Thoughts
Company valuations are of enormous relevance, especially in the sale of medium-sized companies, as they serve as a basis for determining the price. A professional valuation is intended to counteract the conflict of interest between the seller, who wants to maximize the selling price of the company, and the buyer, who wants to pay the minimum price.

Author: Simon Fabsits, MSc

Dealbridge M&A Advisors Austria & Liechtenstein

Exit Planning Tip: Develop recurring revenue streams

Exit Planning Tip: Develop recurring revenue streams

Why should business owners care about their revenue structure, especially when they are considering a sale in the near future?

The recurring revenue business model gets a lot of attention in M&A activities, especially when discussing the purchase price. The EV/revenue and EV/EBIT multiples paid for companies that incorporated software-as-a-service (SaaS) – based business models are significantly higher than software firms with an „On-Premise“ business model. The value of the recurring revenues in the software industry is uncontested.

But there has also been a massive strategy shift in terms of revenue composition in other industries like distribution (think of #Amazon prime), news & media (think of #Netflix), consumer discretionary goods and services (think of #Dollar shave club), healthcare and financial services. But even large industrial and capital businesses, have incorporated recurring revenue streams in their “business-as-a-service” model.

There are several reasons why businesses are shifting towards the recurring revenue model, but the main reason is inherently better predictability of revenues, earnings, and cashflows. This helps the management and owners of a company in budgeting expenses, stocking inventory, and investing in growth and expansion.

When it comes to M&A activity, a high ratio of recurring revenues means that there is less risk and a better base for expansion for potential buyers, which also leads to better conditions in the financing of the transaction and ultimately to higher valuations.

Author:

Simon Fabsits, MSc
Dealbridge M&A Advisors Austria & Liechtenstein