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Valuations

In addition to traditional real estate type valuations, BBA is sometimes called upon to value businesses for investment purposes.

There are myriad valuation metrics that can be used. Each of the below is contextual for the needs of the client.

Problem: an existing business (12 - 15 years old) had bold expansion plans. The business had been approached by investors that sought a low value of the business in order to translate their investment into a large chunk of the existing equity of the owners. BBA thought the investors were being very greedy and undervaluing the business.

 

Solution: look at the 6 year forward value of the expanded business using standard metrics for private equity valuations of EBITDA in Africa from a trusted source and then discounting that value back to today (2017) using varied discount factors.

The value of the business was significantly enhanced by a factor of more than 10 times. Thus, the original owners could keep more of their equity.

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