As the old adage states, "a business is only worth what someone is willing to pay for it". However the process of maximizing the value of a company for the shareholders on exit has numerous factors which can be evaluated and controlled. Let´s see some of them. Supply & Demand By the supply side, if [...]
Value drivers are characteristics of a business that either reduce the risk associated with owning the business or enhance the prospect that the business will grow significantly in the future. An improvement in the performance of the value drivers can significantly increase the value of the company and facilitate the sale at a highest range [...]
The term Enterprise Value (EV) (1) is frequently used when discussing the valuation of a company. A widely used valuation multiple is EV / EBITDA (2). EV represents the total value of a company including both its equity and its debt. When someone says that he or she sold the business for $ 40 million, we do [...]
We frecuently read announcements of millionaire acquisitions by big companies but we know little about if the strategy of acquisitions of a company will produce profits in the long term. Despite the excess of opinions, there seems to be little thoughtful analysis regarding the principles and strategies behind these acquisitions. Successful M&A Processes In 2011, [...]
EBITDA (*) is often taken as an approximation of the operating cash flow of a company and is used as a magnitude to value a business by applying a multiple (eg 3 X EBITDA). Normalizing EBITDA to be a representative indicator of the value of the company makes sense. An experienced buyer will go beyond [...]
A selling transaction for a company typically follows a process similar to that of a private auction. Selling a business normally considers the following stages: a) Defining the exit strategy; b) Determining the value of the company; c) Preparing the information; d) Promoting the transaction; e) Negotiating and carrying out the due diligence and f) Closing of the transaction. Defining the exit strategy [...]
The life of most medium-sized companies occurs by solving commercial and administrative and related issues. Sometimes, shareholders after years of work and specific circumstances, wonder about if a business valuation of their company could be useful. Some situations that may require a business valuation of a company are: Sale, merger or acquisition transaction: For the buyer, [...]
In our last article we present the first part of the pillars on which the Global Competitiveness Index (GCI) is based, which has been used annually by the World Economic Forum (WEF) since 2005 as a tool to measure the competitiveness of countries. The ICG tries in an open and non-definitive way to capture a [...]
This is the first of two posts that briefly describe the twelve pillars on which the Global Competitiveness Index (GCI) is based, which annually and since 2005 is used by the World Economic Forum (WEF) as a tool to measure the competitiveness of countries. For more than 3 decades, WEF's annual Global Competitiveness Reports have [...]
According to the Forrester report 2013, online commerce in the United States will shift the traditional brick-and-mortar within the next 5 years, reaching total annual sales of US $ 370 billion. That is why many entrepreneurs are looking for opportunities to buy online businesses, trying to achieve the benefits of a model that has lower [...]
