Valuation

Valuation is both an art and a science. Uncover how to balance valuation methodologies with strategic objectives.

Last quarter, we predicted there would be a wave of deals in the private equity sector in the coming months. While we may not have seen a “wave” of transactions, deal volume has slowly, but steadily increased in 2013, according to GF Data. While the number of PE deals has not reached a 4Q 2012 […]

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According to Business Valuation Resources, new analysis shows time needed to market and sell a privately held business is 211 days, up from 200 days in previous analysis. Todd Nelson, Capstone Valuation Advisor, weighs in on these observations: “There are many variables that impact the time it takes to complete a private company sale. Those […]

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Capstone is pleased to announce the recent accreditation of Valuation Advisor Todd Nelson. Mr. Nelson has completed American Society of Appraisers’ Accredited Senior Appraiser (ASA) designation program, which is one of the industry’s most vigorous and difficult designations to achieve. We congratulates Mr. Nelson on his achievement. As an ASA, Mr. Nelson joins a select […]

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by John Dearing, Capstone Managing Director GF Data recently published a report noting private equity deals valued between $10 and 250 million averaged 6.4x – the highest levels in three quarters.  This data is an interesting indicator of the M&A market. Although multiples are up, deal volumes remain sluggish for private equity as a whole.  […]

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Unlike traditional valuation models which analyze companies based on past performance, there is a difference in the valuation of an acquisition prospect. You are predicting future synergies that will only materialize after the acquisition. How can you predict these synergies? How can you make calculations based on performance that has yet to happen? Join Capstone […]

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* Guest post by John Dearing, Capstone Managing Director Just last week during a valuation discussion, I noted to the Board to be wary of EBITDA multiple discussions in the world of M&A. As an article from PE Hub points out, when you ask five different professionals to calculate a company’s EBITDA, you’ll come up with […]

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Valuation is a key component of the acquisition process that is widely misunderstood, because people tend to adopt a narrow financial perspective. Valuation should be anchored in your strategic rationale for buying another company in the first place. It all comes back to your business strategy and the synergies that will be created by the […]

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Join me for a webinar this Wednesday, November 28, on one of the most challenging, yet exciting parts of any deal: the journey from LOI to Close. In this webinar you will learn how to: 1. Explain the structure of an LOI and how to make it beneficial to your situation 2. Describe how to mange the […]

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Are you considering an acquisition? Remember, when it comes to buying companies, especially privately held ones, the transaction is almost never about just the price. There is always something going on that falls outside the spreadsheets. Understanding that mysterious ‘‘something’’ is what can make or break your deal. The statistics are frightening. By most reckonings, […]

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While visiting my brother’s family and partaking in a delicious cupcake during my niece’s one year milestone birthday celebration, I had a valuation thought…she was doing what most kids at that age do: copying the older kids’ movements. Waving, smiling, stuffing cake in her face and, of course, throwing everything. Adults, some very experienced, tend […]

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Join Capstone Strategic Managing Director John Dearing & Valuation Advisor Todd Nelson as they discuss Advanced Valuation Techniques in a Capstone Webinar on Wednesday, June 29. For many, business valuation is a complex, intimidating topic.  While valuation is simply a process and set of procedures used to determine what a business is worth, it requires […]

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The housing market is abuzz with cash buyers who seek bargains and don’t want the delays and hassles of securing bank financing. There are several advantages of paying all cash – you can generally get a lower price from the seller because the risk of the deal falling through is lower and the buyer can […]

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This post was written by Capstone Managing Director John Dearing: A client recently asked us to help with VALUATION on a deal they had in their pipeline.  It started off innocently enough.  Walking through Discounted Cash Flow (DCF) basics, adjusting the model to make it more user friendly, and adding terminal value to their model. […]

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I just spoke at the Wisconsin Institute of Certified Public Accountants Spring Conference and the general sentiment was cautious optimism for the next 12 months.  Several attendees mentioned they only see distressed companies selling and at 0.5x revenues.  Another mentioned his firm has lots of cash and no debt but they are hesitant to part […]

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Valuing a for-sale opportunity becomes more challenging during periods of economic and financing uncertainty. During an economic boom, sellers are often able to obtain top dollar due to increased competition among buyers, with readily available financing options. However, in today’s market, buyers are more cautious about the businesses they are buying and the amount they […]

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I wanted to post a quick note about the difference between the valuation of a company and the price that you pay to buy that company.  This distinction came up after a conversation I had the other day with an associate who had difficulty understanding why he was looking at paying a different amount for […]

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I was asked the other day about the meaning of “enterprise value”. We have two different terminologies that are used in the marketplace: enterprise value and equity value. Enterprise value is the value of a business including its debt. Equity value is the value of the business debt free. In some situations, you might be […]

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