Background:
The three owners in an
industrial distribution company
wanted an independent opinion of
value to help them establish an
appropriate price for their
buy-sell agreement.
I used three different
techniques to demonstrate the
potential values: Capitalization
of Earnings, Summary Discounted
Cash Flow, and Detailed
Discounted Cash Flow. For each
technique I also presented
values based on a comprehensive
cash flow basis and a
Discretionary Cash Flow basis.
This resulted in the
presentation of six different
legitimate and defensible
valuations for the business. We
also spent time explaining the
different values and the key
drivers of the differences in
value so that management could
make an informed decision about
the value to incorporate in
their buy-sell agreement.
Output:
Presentation Packet and Detailed
Analysis Packet
