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What do Business Valuation consultants do?

Fintalent’s Business Valuation Consultants offer years of industry experience and expert knowledge that will properly guide investment decisions based on accurate valuations. Fintalent’s Business Valuation experts presents clients with an opportunity to leverage on their expert knowledge without the hassle of going through a long and arduous recruitment and vouching process.

The world's largest network of Business Valuation consultants

Our Fintalents serve clients in North America, LATAM, Europe, MENA, and APAC.

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Hire your Business Valuation consultant in 48 hours

Fintalent is the invite-only community for top-tier independent M&A consultants and Strategy professionals. Hire global freelance M&A consultants and Strategy experts with extensive experience in over 2,900 industries. Our platform allows you to build your team of independent M&A advisors and Strategy specialists in 48 hours. Welcome to the future of Mergers & Acquisitions!

Sergi

Freelance M&A consultant

Barcelona, Spain
7 years experience

Udayan

Freelance M&A consultant

New York, United States
10 years experience

Ferhat

Freelance M&A consultant

Switzerland
5 years experience

Uhriel

Freelance M&A consultant

United States
12 years experience

Lee

Freelance M&A consultant

Vietnam
4 years experience

Why should you hire Business Valuation experts with Fintalent?

Trusted Network

Every Fintalent has been vetted manually.

Ready in 48h​​​

Hire efficiently. Your M&A team is ready in 2 days or less.​​​​

Specialized Skills​

Fintalents are best-in-class - and specialized in 2,900+ industries.​

Code of Ethics​​

We guarantee highest integrity and ethical principles.​​​

Frequently asked questions

What clients usually engage your Business Valuation Consultants?

We work with clients from all over the world. Our clients range from enterprise and corporate clients to companies that are backed by Private Equity or Venture Capital funds. Furthermore, we work directly with Family Offices, Private Equity firms, and Asset Managers. Most of our enterprise clients have dedicated Corporate Development, M&A, and Strategy divisions which are utilizing our pool of Business Valuation talent to add on-demand and flexible resources, expertise, or staff to their in-house team.

How is Fintalent different?

Fintalent is not a staffing agency. We are a community of best-in-class Business Valuation professionals, highly specialized within their domains. We have streamlined the process of engaging the best Business Valuation talent and are able to provide clients with Business Valuation professionals within 48 hours of first engaging them. We believe that our platform provides more value for Corporates, Ventures, Private Equity and Venture Capital firms, and Family Offices.

Our Hiring Process – What do ‘Community-Approach’ and ‘Invite-to-Apply’ mean?

‘Invite-to-Apply’ is the process by which we shortlist candidates for the majority of projects on our platform. Often, due to the confidential nature of our clients’ projects, we do not release projects to our whole platform but using the matching technology and expertise of our internal team we select candidates who are the best fit for our clients’ needs. This approach also ensures engagement with our community of professionals on the Fintalent platform, and is a benefit both to our clients and independent professionals, as our freelancers have direct access to the roles best suited to their skills and are more likely to take an interest in a project if they have been sought out directly. In addition, if a member of our community is unavailable for a project but knows someone whose skill set perfectly fits the brief, they are able to invite them to apply for the role, utilizing the personal networks of each talent on our platform.

Which skills and expertise do your Fintalents have?

The Fintalents are hand-picked and vetted Business Valuation professionals, speak over 55 languages, and have professional experience in all geographical markets. Our Business Valuation consultants’ experience ranges from 3+ years as analysts at top investment banks and Strategy consultancies, to later career C-level executives. The average working experience is 6.9 years and 80% of all Fintalents range from 3-12 years into their careers.

Our Business Valuation consultants have experience in leading firms as well as interfacing with clients and wider corporate structures and management. What makes our Business Valuation talent pool stand out is the fact that they have technical backgrounds in over 2,900 industries.

How does the screening and onboarding of your Business Valuation talent work?

Fintalent.io is an invite-only platform and we believe in the power of referrals and a closed-loop community. Members of our community are able to invite a small number of professionals onto the platform. In addition, our team actively scouts for the best talent who have experience in investment banking or have worked at a global top management consultancy. All of our community-referred talent and scouted talent are subject to a rigorous screening process. As such, over the last 18 months totaling more than 750 hours of onboarding calls, of which only 40% have received an invite-link after the call.

What happens if I am not satisfied with my Business Valuation consultant’s work?

During your initial engagement with a member of our Fintalent talent pool with no risk. If you are not satisfied with the quality of your hire for any reason then we are able to find a replacement at short notice. There is no minimum commitment per project, but generally projects last at least 5 days and can last 12+ months.

Everything you need to know about Business Valuation

Business valuation as part of the M&A process

The process of Business Valuation is integral to the “due diligence” process for the acquisition or sale of a business. The valuation determines an entity’s value and underpins the decision to buy or sell. Regardless of whether you are buying or selling, an objective and accurate Appraised Value is critical to any transaction.

A business valuation is the process of determining a value for a business that does not trade publicly or is privately held. Fintalent’s Business Valuation Consultants admit that Valuing a business can be challenging if there are no or little comparables to compare it to. For example, if you want to value an antique shop, where most of their inventory is unique and can’t be easily compared to similar businesses in the marketplace, you’ll need to use more subjective factors in your analysis.

Overview of business valuation methods

When valuing a privately held business, you can compare the company to public companies that have gone through a similar business transition. The process involves collecting information about the comparable company, which is then used to estimate the value of your private company. Keep in mind that this method doesn’t take into account the unique aspects of your private company.

Comparable company analysis is a valuation technique used to determine the value of a privately held company by comparing its financial performance against other companies similar in size and industry within its peer group. This technique considers both the common aspects of these companies as well as those that are specific to your firm.

An important note: when performing comparable company analysis it is critical to remember that taking into account one or two external factors can have a large effect on the resulting value of your private company. For example, benchmarking a private company against publicly traded companies is not necessarily a good idea because it will take into account situations that have nothing to do with your company. In such cases, you need to perform more sophisticated analyses such as discounted cash flow to determine the value of your firm.

Valuation approach

In addition to the method of valuing your business, there is also some general information that you should consider as you prepare for your valuation. Keep in mind that there are many similarities between private and public companies and that it’s not necessary or recommended that you perform an industry type analysis when valuing a company. This will depend on the unique situation of your firm and its products/services.

Regardless of the type of analysis that you perform, you will inevitably discover some weaknesses in your business. You should take the necessary steps to remedy these issues before moving forward with the valuation process. This is especially important if you are planning to raise capital for your business.

If you want to understand the value of a business, there are two general approaches to take. One is to use a discounted cash flow analysis, which estimates the expected future profits and then discounts them back to present value; this approach will be less accurate if there’s uncertainty in the projections. The other is to look at comparable transactions that have taken place in the marketplace, which is often called an acquisition price multiple method or “APM” and which will be more accurate for companies with stable cash flows.

The vast majority of mergers & acquisitions involve an APM since calculating future cash flows can be complex in most cases. Applying the appropriate valuation multiple is sometimes a subjective process and there may be more than one way to build the relevant comparable set. The key point is that certain companies within a sector or industry group may be more complex to value than others, and their multiples will differ accordingly. If two companies are relatively similar, except one is much more profitable than the other, the less profitable company will typically be sold at a lower multiple.

In cases where there is little to no comparable market for an asset (usually real estate or construction), the valuation can become very subjective. There are generally two approaches to valuing these types of assets. The first is where an expert will determine what they believe the asset is worth based on their own experience or knowledge in the relevant area. The second is a ratio analysis that compares a particular property to one or more properties with known values. This can include looking at sales prices of comparable buildings in a similar area, or comparing renovation costs for comparable buildings with known costs, etc..

Example of an APM Calculation

Here is an APM calculation for a company in the auto industry. It is taken from a valuation of Xerox Corporation, which was completed by GMAC in 2002 but many of the assumptions are still relevant today.

To begin, Xerox’s estimated future annual revenues are $8,422 and its future annual expenses are $6,540; then it is discounted to today’s value with a 10% discount rate. The resulting free cash flow is $1,721 per year. Let’s assume the firm is sold in five years for $18,000, which is a 2.6 multiple of free cash flow; this would provide an estimated value of $12,000. At twice free cash flow would result in a value at least four times as high, and so on; this ratio analysis indicates that investors might expect a multiple of four times free cash flow to be reasonable.

To quickly review:

1) The total market capitalization is $5 billion. The GMAC analysts believe that the firm’s stock price should be not higher than 55% of total market cap (the analysts calculated this based on the company’s profitability and growth prospects).

2) The business has revenues of $842 million and expenses of $642 million.

3) The firm is expected to generate free cash flow in the future of $1,721.

4) A good multiple for this company would be a multiple of 2.6 times free cash flow, or a multiple of 2.6 times 10% of total market cap. So, if a buyer is willing to pay $18 billion for the business, then it would account for 2.6 times Xerox’s free cash flow of $1.721 billion, or $4.437 billion. That would be a reasonable purchase price for the company; it is not likely that Xerox could sell for more than that at this point in time without its business suffering.

The valuation of hedge funds and private equity firms is more complex because there are many different types of fees structure as well as multiple LPs with differing rights and withdrawal delays.

First we must state that the value we place on a private equity investment is based on our view of future performance. Therefore, if bond yields are going up and we expect the bond market to become more sticky and thus favor buybacks as much as new equity issues, we would be looking at a situation where values need to converge. The same happens when valuations do not converge.

Types of PE funds

The Value of an investment in a private equity fund depends on its four main components: Investment Multiple, Time Horizon, Future Cash Flows & Risk. Investment multiples vary from 6x to 15x. Up to a point, a 6x multiple is reasonable because the funds have a high degree of leverage and therefore can deliver a lot of excess returns. However, if an investor expects less than 20% returns after 5 years, then that investor is probably better off with a longer time horizon. Some investors seek 3-5 year time horizons for true value creation and longer periods of “busts” whereby cash flows may be negative but can recover in the future. Therefore, value can maintain a positive trend for years.

The liquidity of the investor also has an impact on PE investments. Historically, U.S.-based investors have been average to poor in terms of liquidity, but overseas investors are now beginning to buy more actively and sit atop portfolios. In theory, these buyers are able to take advantage of longer time horizons, but also take a risk that they cannot find close substitutes for their investments in future years. The question then arises, do they feel that they can get out before the 5-year mark? The answer will be yes if these new investors have access to secondary markets or future liquidity puts. It is our view that most U.S.-based investors will want to get out after 5 years and will welcome these additional liquidity options.

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Hire the best Business Valuation specialists in 2,900+ industries

Fintalent is the invite-only community for top-tier M&A consultants and Strategy talent. Hire global Business Valuation consultants with extensive experience in over 2,900 industries. Our platform allows you to build your team of independent Business Valuation specialists in 48 hours. Welcome to the future of Mergers & Acquisitions!