Valuations
Determining the Value of Your Business
Independent business valuation services are a key component of the CWIC Equity Solutions Ltd product offering. Companies may require an independent valuation as part of a fundraising round as well as when either exiting a business or making an acquisition.
Valuations in More Detail
The importance of an independent valuation
Independent business valuation services are a key component of the CWIC Equity Solutions Ltd product offering. Companies may require an independent valuation as part of a fundraising round as well as when either exiting a business or making an acquisition
The CWIC approach
Overview
CWIC values businesses using a select group of metrics which are based on present value, peer group comparisons and return on capital models. We combine our analysis to generate a hard valuation. CWIC is currently the preferred provider of independent valuations to TAG Investment Bankers Ltd.
Relative valuation
CWIC assesses a relevant peer group for your business where there is are observable valuations based on either market capitalisations for listed companies or trade sale values for both listed and private companies. These can be used to generate an average Enterprise value/sales ratio or an Enterprise value/EBITDA ratio. These averages, of which the more important is arguably EV/sales are then used to drive the valuation of your business.
Discounted cash flow
CWIC uses a templated model to generate a present value of businesses based on future cash flows and a terminal growth rate. We look for 5 to 10 years of cash flows in the "specific forecasting period" and apply a long-term growth rate to generate a terminal value. The sum of the discounted cash flows and the terminal value is the DCF-derived value of your business.
Capital asset pricing model
The CAPM approach compares return on assets with cost of capital. The higher the return on capital/net equity and the lower the cost of capital, the greater the value of your business in relation to net assets. We use the same cost of capital in CAPM as was applied to DCF and adjust both the return and cost of capital for growth.
Valuation result
Our valuation result is typically the unweighted average of all the methodologies used. By using 2 to 4 objective approaches to valuation we argue that our overall process is robust.
The service offer - fixed fee basis
Business valuations are offered as a discrete service for a fixed fee. Once the valuation analysis is complete, clients are provided with a full, formatted valuation report. Where required, TAG Investment Bankers Ltd will provide a full regulatory umbrella for CWIC’s valuation analysis.
Our valuation reports include an evaluation of the business using such focus points as proof of concept, addressable market, due diligence on the business and an assessment of the leadership team.
Valuation work is charged out on the basis of a daily consulting rate - typically valuations and the accompanying report can be completed in 1 to 2 days.