Business valuation

The valuation of a business is typically associated with a change in share ownership or structure, or with a business being sold.

At the end of the day, the value is what anyone is willing is to pay - the purpose of a professional valuation is that it provides a basis for negotiation. When valuing a business there are a number of issues to assess including:

Shareholder disputes
Perhaps minority shareholders' rights are being suppressed and they seek protection of the Court.
Valuation of a holding of a minority shareholder can give rise to complexities such as issues of open market value or fair value. The company might be regarded as a "quasi partnership".

Breach of contract and loss of profits
A valuation may be required when a breach of contract or a business interruption has resulted in the demise of a business or has had a prejudicial impact on it.
Whilst it is possible to calculate profits lost over a specific period, it is often difficult to assess when to terminate the loss of profit calculation where there is no obvious termination date or where business profits have failed to return to normal.

Breach of warranty claims
Where a breach of warranty action relates to the sale of a business, the valuer is required to assess the impact of the breach on the price that was actually paid. This can often be complex. The expert will need to establish the open market value between willing buyers and willing sellers that an objective purchaser would have paid. The loss claim is formulated as the value of the business had the warranty been true and its value in light of the fact that the warranty is false.
Grant Thornton's wide experience means we can give you an informed indication of what your company may be worth. We will fully explore the many considerations involved and making a proper assessment of your company's current financial position.