fbpx

Business Valuation

Business Valuation

Business Valuation

Business Valuation is a technique to measure the fair equity value of an existing company or business, expressed in monetary terms at a particular point of time. Fair equity value is the value of an asset and/or liability for a company or a business activity.

Companies require conducting business valuations for many reasons such as:

  1. Mergers and Acquisitions (M&A)
  • Acquiring an asset or shares of a potential target
  • Merging with another entity
  • Developing Purchase Price Allocation (PPA) for new acquired assets in compliance with IFRS 3 – Business Combination, IFRS 13 – Fair Value Measurements
  1. Equity Change
  • Introducing a new shareholder/partner into a company
  • Initial Public Offerings (IPO) and Private Placement
  • Spinoffs
  1. Corporate Restructuring
  • Disposal of an equity stake in a company
  • Debt financing
  • Liquidation

There is a wide range of valuation techniques in Business Valuation. They may be asset based, income based or market based. However, the most critical decisions involve the selection of the most appropriate valuation techniques for a given situation and ensuring their precise application.

We at Baker Tilly are experts in choosing the suitable valuation technique and in identifying the weighted average of each technique to drive the fair equity value.

It is worth mentioning that companies under the supervision of the Capital Markets Authority in Kuwait should comply with the Executive Bylaws of Law No. (7) of 2010 where Module Nine – Mergers and Acquisitions – highlights the regulations that should be taken into consideration when measuring the fair equity value of a company. Module Nine – Mergers and Acquisitions highlights the following:

Article 2-9 and Appendix 1 under clause No. 3 Companies involved in Merger process should seek independent advice from an independent Investment Advisor.
Article 3-1-5 and Appendix 2 under clause No. 4 and clause No. 10 In case of Voluntary Acquisition, an Offeror Company, if listed in Bousra Kuwait, should seek independent advice from an independent Investment Advisor.
Article 3-1-5 and Appendix 3 under clause No. 4 In case of Non Cash Voluntary Acquisition, an Offeror Company, if listed in Bousra Kuwait, should seek independent advice from an independent Investment Advisor.
Appendix 4 under clause No. 9 In case of Competitive Acquisition, the offeree company should seek independent advice from an independent Investment Advisor.
Article 3-1-5 and Appendix 5 under clause No. 3 and clause No.8 In case of Mandatory Acquisition, an Offeror Company, if listed in Bousra Kuwait, should seek independent advice regarding the offer from an independent Investment Advisor.
Article 3-1-5 and Appendix 8 under clause No. 3 In case of Reverse Acquisition, a Company, if listed in Bousra Kuwait, should seek independent advice regarding the offer from an independent Investment Advisor.

In addition, Module Eleven – Dealing in Securities – in article 14-3 clause No. 10 highlights the regulations that should be taken into consideration when conducting business valuation of unlisted companies involved in the purchase of their own shares (Treasury shares).

Added value to business entities from Business Valuation Services:

  • Know the fair equity value of company or business, and hence assist business entities with making strategic and financial decisions.
  • Expand the base of prospective investors.

Services provided by Baker Tilly

Baker Tilly has a vast experience in Business Valuation accumulated over years of practice in this arena. Its experts have been involved in complex valuation transactions in all sectors with a proven track record, numerous recognitions and awards in this field. Baker Tilly is a listed “Investment Advisor” at the Capital Markets Authority.

icon-angle icon-bars icon-times Scroll to Top