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The Market Today and Business Valuation

The Market Today and Business Valuation. Avondale - master brokerage in commercial business sales, acquisitions and strategy. Acquisition briefs up by 200% Sales increased by 50% Demand but why?. When to sell?. Personal Cross Roads. Strategic Cross Roads. Growth Options.

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The Market Today and Business Valuation

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  1. The Market Today and Business Valuation Avondale - master brokerage in commercial business sales, acquisitions and strategy. Acquisition briefs up by 200% Sales increased by 50% Demand but why?

  2. When to sell? Personal Cross Roads Strategic Cross Roads Growth Options Positive perception Leap of faith

  3. When to Buy? House is in order Organic growth slowing Synergy Deal/Culture right Economies

  4. ValuationsVarious methods Discounted cash-flow IP/capital projects/Start ups Price Earnings Ratio PBIT/EBITDA Include net assets Debt free/cash free/ What assets? Revalue P/E What profits? Sustainable/art Earnings

  5. P/E Multiples PBIT/EBITDA £000’s

  6. Adjusted Profits- example

  7. Value: £316,576 x 4 Adjusted profit x Probable multiple= £1.26 mlIncluding balance sheet debt free/cash free £220,000 Forecast - example Marketed on Offers - Bids/auction (in top 5 in UK)Offer achieved £1.7 million - All Cash Dutch company seeking UK base.

  8. Deal Structure Performance related payments Rules Deals Structure effects multiples Secure the Risks Avoid profit related Gross Profit easier to calculate Reverse Non Compete clause Guarantees/Debentures/Charges Access to Records Materially same as present Escrow Earn-outs common Can help buyers hedge risk Multiple Influencer

  9. Art not science Preparation/ Approach Income V Capital The Double Check Risk Strategic deal Comparables

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