Company Valuation

About

Escalating competition has led to an increasing number of acquisitions and merger activities, resulting in the requirement for specialist calculation of company valuations. Valuing a business, whether as a potential acquirer or a share purchaser, requires competence in a wide range of analytical skills.

This specialist seminar will give you hands on experience in the application of valuing companies and evaluating potential take-over targets. It will provide you with the latest techniques and information that you really need to effectively conduct business valuation. It will provide crucial insights into measuring, managing and maximising a company’s value.

Attendance at this seminar will ensure that you are up-to-date with the latest advances in corporate finance theory and that you have a thorough understanding of valuation techniques in order to make better informed investment decisions.

Key learning objectives
By the end of this seminar you will be able to:
1. Review the range of valuation techniques that are available
2. Compare the use of traditional valuation techniques with recent valuations
3. Understand the real underlying value of a business
4. Identify the valuation target and ascertain the right mix of tools to value it
5. Value companies for mergers, acquisitions, privatisation or capital raising
6. Understand the techniques for measuring the risks associated with corporate valuations
7. Learn how to recognise when an earnings-based valuation is appropriate
8. Value intangible assets and intellectual property
9. Understand cash flow modelling and forecasting
10. Understand the valuation implications of implementation of International Financial Reporting Standards

Who should attend?
This seminar is essential for finance managers who are involved in, or are considering, acquiring companies or participating in joint ventures. It will be especially valuable for:
• Chief Financial Officers
• Finance Directors
• Financial Controllers
• Managing Directors
• General Managers
• Accountants
• Corporate Lawyers
• Corporate Finance Managers
• Investment Bankers
• Auditors

Training methodology
Our aim is to ensure that you learn from practical examples where possible. This two-day course will use a mix of practical examples and tutorial sessions. Learning will be through a series of interactive valuation exercises where you will apply learning from the course to real-world situations. All attendees will be provided with a workbook and a certificate of attendance.

Outline

DAY ONE

8.30 Registration

The principles of corporate finance and an overview of valuation techniques
• What is corporate finance?
• The concept of shareholder value
• When valuations are necessary: Acquisitions, share offerings, buy- outs
• Fundamental valuation principles
• Different valuation circumstances
• Sources of finance for corporate transactions
• The investment decision and the finance decision
• Balancing quantitative and qualitative factors

Earnings-based valuation techniques
• When is an earnings-based valuation appropriate?
• Various earnings measures examined - Understanding the acronyms
- EBITDA
- EBIT
- NPAT

The differences between earnings measures and cash flow
• Measurement of historical and prospective earnings
• Derivation of multiples:
- EBIT multiples
- PE multiples
- Sales multiples
- Asset multiples
- Cash flow multiples
Case study: Practical case study of an earnings-based valuation

Identifying the valuation target
• What is it that you are attempting to value?
• From whose perspective are you valuing?
• Valuing on a stand-alone basis or with synergies?
• How existing corporate structure can add/hinder the value of the asset/business you are valuing
• Valuing businesses when they are still part of a greater organisation/ business and the challenges encountered

The cost of capital
• The importance of cost of capital
• Components of cost of capital
• Assessing the cost of debt
• Assessing the cost of equity
• Application of cost of capital theory to NZ companies
Case study: Example of deriving the cost of capital for a cash flow-based valuation

DAY TWO

What is cashflow?
• How cashflow is linked to value drivers
• Incorporating risk and change of circumstance into cashflow analysis
• Matching historical data with forecast projections
• Scenario and analysis of cashflow
• Effective cashflow modelling techniques

Cashflow modelling explained
• How to forecast cashflows successfully
• Understanding the acronyms:
- DCF (Discounted Cash Flow)
- FCF (Free Cash Flow)
- CAPM (Capital Asset Pricing Model)
Practical case study of a DCF valuation

Valuations under IFRS
• Valuation issues arising from implementation of IFRS
• Identifying intangible assets requiring valuation under IFRS
• How is intellectual property/capital valued?
• Purchase price allocation and impairment testing
Practical case study of an intangible asset valuation

Private company valuations
• Is it more difficult to value a private company compared with a public company?
• Valuing an unlisted entity
• Calculating the cost of capital for an unlisted entity
• Risk premia for unlisted entities
• Marketability and other discounts / premiums
• Actual observed premia for unlisted entities
Practical case study of a private company valuation

Facilitator

Tony Davis, BCom (Hons.) First Class, CSAP, Director, Grant Thornton Corporate Finance

Tony Davis is a director of Grant Thornton Corporate Finance.  He is an honours graduate in finance and a Certified Securities Analyst Professional member of the Institute of Finance Professionals New Zealand.  He specialises in valuation of businesses, shares and intangible assets as well as expert financial investigation and the assessment of economic damages in matters subject to litigation or dispute. He has expertise in the valuation of business combinations and intangible assets under IFRS.  He has appeared as an expert financial witness before the court and other dispute resolution forums.  Tony has more than twelve years experience in business valuation, investment banking and financial investigation roles. He has previously presented on several occasions on the principles and practice of business and company valuation and the valuation of intangible assets.

Tony has been employed by Grant Thornton Corporate Finance, and before that Frankham Lyne, since February 2000. Frankham Lyne merged with Grant Thornton in 2005.  Prior to joining Frankham Lyne, Tony worked for five years in an investment banking role.  His experience there included investment analysis and valuation, capital raising, business establishment and finance roles in private sector investments.

In-house Training

Prices and Registration

* Early bird price available when you register and pay before the dates listed.