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Purchase Price Allocation
Independent and reliable solutions to meet your purchase price allocation needs. Customized valuation packages at competitive rates.
WHY CHOOSE US
We are a specialized valuation company providing end-to-end assessment services. Our team has extensive experience in the field of purchase price allocation.
Our team is headed by a finance professional having more than 20 years of experience in valuations.
We follow the best industry practices and approach giving our clients the best services in the market.
We are all about delivering quality Purchase Price Allocation valuations at competitive pricing for our clients.
YOUR BUSINESS NEEDS TO STAY DYNAMIC IN A COMPLEX ECOSYSTEM
PPA Advisory Under ASC 805 And IFRS 3
Post-transaction, our team’s finance professionals work with clients to allocate the entire consideration of acquisition transactions and estimate the goodwill in the deal. We make sure it is in compliance with different global accounting standards.
Pre-Acquisition PPA Impact
We also provide pre-acquisition advisory which helps clients understand the impact of the transaction and potential allocation of consideration. This helps them see the effect of goodwill on the financial statement of the acquiring company.
Profit Impact Analysis
We also partner with clients in conducting a detailed profit analysis of the M&A transaction, Purchase Price Allocation, impact on the EPS, and the suitability of the transaction inline with the strategy of the company.
OUR DETAILED APPROACH
Valuation is a complex process, and the right methods depend on different factors like industry, stage of the company, size of the company, business models, etc. We apply unique models for each of our projects based on our detailed analysis.
The method of allocating a fair value to all the assets procured and liabilities presumed of a target company is known as purchase price allocation (PPA). A company needs to undertake this exercise when either a listed or private company, which prepares financial statements under International Financial Reporting Standards, acquires or merges with a company in the M&A process and has paid the purchase price or consideration in the acquisition.
In other words, a price purchase allocation should be typically carried out either when there is an acquisition of the business or a change of control of the management of the company Usually, this method leads to some unassigned residual value consisting of goodwill In such a situation, the purchase price paid to the target company needs to the allocated to all the assets of the seller company. In other words, all the assets and liabilities have to be valued on a fair value basis.
There here are four basic steps in a purchase price allocation that the company have to follow if they need to analyze the transaction from the financial and tax purposes, these are given below:
- Price Consideration : First, Company needs to the total consideration paid for the acquiziation of the target company. This includes all kinds of cash and non cash consideration paid or transferred by the Company. In the analysis, the Company also have to properly estimate the libailities paid or assumed in the M&A transaction and these must be properly estimated and included in the calculation of the Price Consideration for the M&A Transaction.
- Valuation of Tangible Assets The second step is to find all types of tangible assets like land building, fixed assets, machinery, etc acquired in the M&A process. Then, these assets are valued using various methods like cost, market, and income approaches. This has to be inline with various accounting,valuation and reporting guidelines under various rules and regulations.
- Valuation of Intangible Assets : The third step is to identify all the intangible assets like patents, IPs, licenses, contracts, , copyright, formula, process, design, pattern, knowhow etc and then value these assets as per the prevailing valuation and accounting guidelines. In this process, all assets are analyzed and valued at the fair value using cost, market, and income approaches.
- Calculation of Goodwill : The fourth step is to find the find the goodwill, which is price consideration minus the fair value of the tangible and intangible assets.
Intangibles are one the most critical components of the PPA allocation exercise. In many cases, intangible asset valuation is valued via multiple complex methods and process. In the valuation of intangibles, there are many key factors that impact the valuation including visibility, exclusivity, and protection rights of these assets.
As per various financial reporting standards and guidelines, intangibles assets is measured and valued as a separate assets over and above the goodwill in the purchaser price allocation which is excess price paid over the fair value of all tangibles and intangibles assets. This make the entire PPA process very complex and time consuming.
In addition to identification of intangibles, global accounting and reporting standards also mandate the regular testing of intangibles and goodwill for the impairment. This has to tested regularly and any fall in the value has to be written off and recorded as the guidelines and standards.
If a buyer prepare financial statements as per GAAP or IFRS and acquires a company, then as per the reporting requirements, the buyer is obligated to carry out a purchase price allocation except in instances when the acquisition is too insignificant and hence, it will be considered unimportant.
The acquirer’s auditor then carries out a thorough analysis of the valuations of the assets and liabilities. In such a case, you need to offer answers to all the questions from the auditor, which could be a few questions or multiple pages of questions. Therefore, you need to collaborate with an independent valuation expert because greater the valuation quality and richer the experience, lesser will you spend time and money on the evaluation process.
Besides, if the valuation of the acquired intangible assets is of unsatisfactory quality or objectionable to the auditor, you may have to a carry out the valuation from scratch at additional expenses. Therefore, team up with Valueteam for excellent valuation solutions and for saving your time and money and avoiding potential business problems.
OUR UNIQUE SERVICES
Diverse and reliable Services
Valueteam offers diverse and reliable valuation services. We are trusted by various companies across the globe. Our team of finance professionals has vast experience across all sectors and stages of a business. We ensure that we will provide you with the best solutions that meet your organization’s needs.
We are a team of finance professionals who offer excellent quality and specialized business valuation and advisory services that are delivered within our client’s set timelines. Our services are provided by knowledgeable experts who are regularly updated with the latest and current events on the global market.
Customized and Cost-Effective
Valueteam is composed of professional finance experts who can easily understand client requirements. We make sure to provide targeted and cost-effective solutions without compromising on the quality of the services. With our deep-rooted research mindsets, we can find a business solution that will meet your needs.
HOW DOES VALUATION HELP YOUR BUSINESS?
Benefits of valuing a business
Business valuation can help you to buy or sell a business with ease, discuss better terms with the buyers or sellers of the company and choose the right time for selling or buying a business.
Periodic valuation is a good practice because it helps you evaluate and appraise your business functioning; uncover business areas that need improvement, and quickly raise capital for your business .
VALUETEAM: YOUR THIRD-PARTY VALUATION CONSULTANTS
At times, many firms single-handedly carry out an acquisition process without the assistance of valuation consultants such as Valueteam. In such a situation, you may miss out on the many crucial benefits that we can offer.
Expert third-party valuation consultants such as Valueteam can offer the following advantages:
- Accelerate your strategic planning as an independent expert valuation adviser;
- Carryout market and company research without revealing your concern;
- Facilitate contact with business owners (particularly insightful when contacting not-for-sale ventures);
- Expedite flourishing relationships and collaborations with entrepreneurs;
- Offer fact-based and expert valuations;
- Assist in designing the deal structure;
- Offer advice during the preliminary incorporation of your organisation.
Core valuation principles of Valueteam
The following core principles of Valueteam will help you to get a high success rate in all your valuation needs:
- Focus one specific reason to buy or sell a company; more than one reason can led to ambiguous decisions;
- Before choosing companies to acquire, choose the market first, which is the perfect recipe for a great strategic approach;
- Demand propels the growth a company. Therefore, concentrate on the future demand as a basic selection prerequisite;
- Concentrate on not-for-sale companies because every company is up for sale for a suitable calculation.
WHY DOES YOUR COMPANY SPECIALIZE ON VALUATION?
We specialize in valuations because we see a need in helping companies track the effectiveness of their strategic decision-making process. Our team has deep experience in tracking business performance in terms of the estimated change in value.
WHY IS THE PURCHASE PRICE ALLOCATION (PPA) ESSENTIAL?
It is crucial to execute PPA exercise properly because they show the results of the transaction to investors looking at financial reports. An improper PPA can drastically affect your company’s balance sheet, income statement, and reporting quality.
WHY DO WE NEED TO ASSESS THE FAIR VALUE OF ASSETS?
Fair value is the set price for selling an asset or transferring a liability. During acquisition, the fair value of assets is assessed to get an appropriate picture of the goodwill resulting from the acquisition.
WHAT ARE THE DIFFERENT TYPES OF SERVICES VALUETEAM PROVIDES?
The professional finance team at Valueteam offers many types of fairness opinions such as buy-side and sell-side mergers and acquisitions, spin-offs, split-ups, divestitures, going-private dealings, and related-party dealings.
HOW MUCH TIME DOES IT TAKE TO CARRY OUT A BUY-SELL VALUATION?
Generally, it takes 7 to 21 days to complete our detailed analysis and valuation. In case you have time limitations, let us know, and we will complete the work on a priority basis at no additional cost.
Valueteam is your single-window solution for valuation and consulting services.
Our valuation team have the right mix of professional and industry knowledge and apply a practical approach to deliver the right services to our clients.