Blog about corporate finance

Planning in times of COVID-19

“The best plan not executed is not the best plan” The lockdown and social distance measures due to Covid-19 have generated a global economic shock on supply and demand. In most companies, there is [...]

Earn-outs to negotiate business valuations in M&A deals

Earn-outs are pricing structures in M&A transactions, set when the vendor and purchaser cannot agree on a valuation for the business being bought or sold. An earn-out bridges the gap between the two valuations and [...]

6 types of successful acquisitions

The authors suggestions for M&A strategies that create value reflect the McKinsey acquisitions work with companies. According to their experience: in M&A, acquirers in the most successful deals have specific, well-articulated value creation ideas going in. The [...]

A playbook for M&A

M&A activity represents globally more than US $ 3 tn every year, however research shows that between 50% and 85% of the transactions carried out do not reach the objectives that were initially established to [...]

European M&A Outlook 2017 and trends 2018

In the second quarter of 2017, Mergermarket surveyed senior executives from 170 corporates and 60 PE firms based in Europe about their expectations for the European M&A market in the year 2018. All respondents have [...]

Family offices: Managing wealth

Trying to define what a family office is, we are not likely to ever find a uniform definition that encompasses everyone’s notions of what family offices should do or entail. In reality, family offices and [...]

Corporate venturing to capture innovation

The need for growth has led companies to identify and acquire disruptive opportunities and protect against the rapid innovation faced in many industries. Firms established in the market have confronted the threat of becoming obsolete [...]

Planning Ahead for the Sale of a Business

Planning and preparing the sale of a business, favors more robust sale processes and reduces the likelihood that potential buyers will be distracted by questions and issues that could easily have been foreseen. Here is [...]

Business Valuation vs Brand Valuation

There are situations in which, instead of a business valuation, a brand valuation is needed; In these cases, it is difficult to define what the brand is, what portion of the cash flows generated by [...]

Business valuation: How to value a start up

Valuation of a pre-revenue company is often one of the first points of contention that must be negotiated between angels and entrepreneurs due to the fact that there is no agreed upon standards for startups [...]

EBITDA what does it measure and how to calculate it

EBITDA (Earnings before interests, taxes, depreciation and amortization) is equivalent to Gross Operating Income (in Spanish, Resultado Bruto de Explotación) because it reflects the excess of operating income over expenses related to those revenues in a period [...]

Increasing the business value

From an economic point of view, a company creates value when the business generates greater income than the costs of producing it, including charges for capital allocation. To create value, managers must have a thorough [...]

Business valuation by comparable multiples approach

The comparable model is a relative valuation approach. The basic premise of the comparables approach is that an equity’s value should bear some resemblance to other equities in a similar class. For a stock, this can simply be [...]

The value of a valuation and the timing in selling a business

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 [...]

The 10 value drivers to sell your business at the highest price

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 [...]

Social impact investments

In the last 40 years the development of technology and telecommunications led by entrepreneurs has deeply transformed our lives. In many cases, companies started by young entrepreneurs surpassed others that until then had been leaders [...]

Enterprise value and equity value

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 [...]

The 6 basic principles for strategic acquisitions

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, [...]

The top ten EBITDA adjustments to make before selling a Business

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 [...]

Stages of selling a company

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; [...]