SlideServe
Télécharger Obtenir Pro
Menu
Accueil Pro
Préférences
ApparenceLight Aide et commentaires
© SlideServe · v2026

Valuing Private Companies: Factors and Approaches to Consider

elie avatar
elie
35 diapositives · 923 Views · Aug 08, 2014

Valuing Private Companies: Factors and Approaches to Consider. Presenter Venue Date. Public vs. Private Valuation: Company-Specific Differences. Public vs. Private Valuation: Company-Specific Differences. Public vs. Private Valuation: Stock-Specific Differences.

#valuing private companies: factors and approaches to consider #valuing private companies: factors and approaches to consider ppt #powerpoint #presentation
Valuing Private Companies: Factors and Approaches to Consider - slide 1
01 / 35Valuing Private Companies: Factors and Approaches to Consider
1 / 17

Télécharger la présentation

Valuing Private Companies: Factors and Approaches to Consider
Une image / un lien ci-dessous est fourni (tel quel) pour télécharger la présentation

Politique de téléchargement : le contenu du site vous est fourni TEL QUEL pour votre information et votre usage personnel ; il ne peut être vendu, concédé sous licence ni partagé sur d’autres sites sans l’accord de son auteur.Le contenu vous est fourni TEL QUEL, pour votre information et votre usage personnel uniquement. Téléchargez la présentation en cliquant sur ce lien. Lors du téléchargement, si vous ne parvenez pas à télécharger une présentation, l’éditeur a peut-être supprimé le fichier de son serveur.Pendant le téléchargement, si vous ne parvenez pas à obtenir une présentation, le fichier a peut-être été supprimé par l’éditeur.

F I N

Plus de contenu associé

Transcription de la présentation

  1. Valuing Private Companies:Factors and Approaches to Consider Presenter Venue Date

  2. Public vs. Private Valuation:Company-Specific Differences

  3. Public vs. Private Valuation:Company-Specific Differences

  4. Public vs. Private Valuation:Stock-Specific Differences

  5. Reasons for Private Equity Valuations

  6. Definitions of “Value”

  7. Private Valuation Approaches

  8. Earnings Normalization

  9. Example: Earnings Normalization

  10. Cash Flow Estimation

  11. Income Approach: Three Methods • Free Cash Flow • Based on the present value of future estimated cash flows and terminal value using a risk-adjusted discount rate • PV of expected future cash flows + PV of terminal value • Capitalized Cash Flow • Based on a single estimate of economic benefits divided by an appropriate capitalization rate • Residual Income (Excess earnings) • Based on an estimate of the value of intangible assets, working capital, and fixed assets

  12. Capitalized Cash Flow Method

  13. Excess Earnings Method • Residual income = • Normalized earnings – (Return on working capital) – (Return on fixed assets) • Value of intangible assets = • Value of the firm = • Working capital + Fixed assets + Intangible assets

  14. Example: Excess Earnings Method

  15. Example: Excess Earnings Method • Return on working capital = 5% x $400,000 = $20,000 • Return on fixed assets = 12% x $1,600,000 = $192,000 • Residual income = $225,000 – $20,000 – $192,000 = $13,000 • Value of intangible assets = ($13,000 x 1.03) / (0.18 – 0.03) = $89,267 • Value of firm = $400,000 + $1,600,000 + $89,267 = $2,089,267

  16. Discount Rate Estimation Issues Size Premiums • Size effect can increase discount rate Cost Debt • Relative availability may be limited  increased cost of debt • Higher operating risk  increased cost of debt Discount Rates in an Acquisition Context • Should be consistent with cash flows, not buyer’s cost of capital Projection Risk • Uncertainty associated with future cash flows Life Cycle stage • Classification, early stage difficulties, company-specific risk

  17. Required Rate of Return Models

  18. Example: Required Return Models

  19. Example: Required Return Models

  20. Market Approach: Three Methods

  21. Guideline Public Company Method

  22. Guideline Transactions Method

  23. Prior Transaction Method

  24. Example: Guideline Public Company Method

  25. Example: Guideline Public Company Method Public price multiple will be deflated by 18 percent • Due to increased risk of private firm If buyer is strategic • A control premium of 20 percent from previous transactions is applied If buyer is nonstrategic • No control premium is applied

  26. Example: Guideline Public Company MethodStrategic Buyer Risk adjustment: 9.0 × (1 – 0.18) = 7.4 Control premium: 7.4 × (1 + 0.20) = 8.9 Value of firm: 8.9 × $28,000,000 = $249,200,000 Value of equity: $249,200,000 – $6,800,000 = $242,400,000

  27. Example: Guideline Public Company MethodFinancial Buyer Risk adjustment: 9.0 × (1 – 0.18) = 7.4 The control premium is not applied Value of firm: 7.4 × $28,000,000 = $207,200,000 Value of equity: $207,200,000 – $6,800,000 = $200,400,000

  28. Asset-Based Approach

  29. Valuation Discounts/Premiums

  30. DLOC Example Given a control premium of 19 percent

  31. Valuation Discounts

  32. Valuation Discounts Given a DLOC of 20 percent & DLOM of 16 percent

  33. Valuation Standards

  34. Summary

  35. Summary