Company Sale Valuation
A Company Sale Valuation is a formal, independent appraisal of a privately held business prepared to support the sale of a company. These valuations provide an objective assessment of value based on the company’s financial performance, risk profile, industry conditions, and relevant market data and are commonly used by business owners, buyers, and advisors during transaction planning and negotiations.
In addition to supporting a sale transaction, a company sale valuation report may also be used in connection with transaction structuring and pricing discussions where an independent valuation is required. The valuation provides a well-documented and defensible conclusion of value that can be relied upon by buyers, sellers, attorneys, and other stakeholders involved in the transaction. This company sale valuation supports decision-making, negotiations, and transaction execution, with clarity, confidence, and accuracy.
Our company sale valuations are prepared to determine the value of a business in connection with a purchase and sale transaction. The valuation is developed in the context of the proposed transaction terms and reflects how the transaction is structured, including whether the sale is structured as an asset sale or an equity sale and which assets and liabilities are included or excluded.
The analysis is designed to produce a clear, well-supported indication of value that aligns with real-world transaction economics and can be relied upon by buyers, sellers, and their advisors. Each company sale valuation is tailored to the specific transaction, and our company sale valuation process emphasizes consistency, transparency, and defensibility throughout negotiations and deal execution.
METHODOLOGY
The valuation methodology is selected based on the nature of the business, the quality of available financial information, and the transaction structure. One or more generally accepted valuation approaches may be applied, including the Income Approach (capitalization of earnings and discounted cash flow analysis), the Market Approach (guideline transaction method and market multiple analysis), and, when applicable, the Asset-Based Approach (adjusted net asset value). The selected approaches and their relative weighting are fully explained in the valuation report and tied directly to the economics of the transaction, reflecting market participant assumptions, risk considerations, and transaction-specific factors considered.
FINANCIAL STATEMENT NORMALIZATION ADJUSTMENTS
Historical financial statements are reviewed and adjusted, where appropriate, to reflect normalized operating results on a market-participant basis. Because financial statements are often prepared for tax or internal purposes, they may include non-recurring, discretionary, or owner-specific items.
Normalization adjustments may include owner and related-party compensation, discretionary or personal expenses, non-recurring items, and related-party transactions (including rent), to reflect market-based terms. The resulting normalized financial results represent the earnings a hypothetical willing buyer would expect under typical ownership and management.
INFORMATION REQUIRED FROM THE CLIENT
To complete a defensible company sale valuation, we typically request federal tax returns or financial statements for the past three years, the most recent interim financial statements if available, and a completed questionnaire covering the company’s operations, ownership structure, and management. Additional documents may be requested as needed following the initial analysis.
TIMELINE AND DELIVERABLE
Once all required information is received, the valuation process can begin. Most company sale business valuations are completed within 2–3 weeks, depending on the complexity of the business and the availability of information. The final deliverable is a comprehensive written valuation report prepared to support transaction planning, pricing, and negotiations.