Valuations / Fairness Opinions
A realistic and up-to-date valuation of a company is essential. If owners and management are not aware of the worth of their businesses, any forward planning and key decisions of the business will be based on unfounded criteria.
More than 500 families and companies have trusted RIóN with determining their valuations.
When considering the sale of a company, in whole or partially, we assist in finding out whether the time is ripe. We determine the fair market value and identify the key-values to drive the price negotiation. Should expectations be out of line with current market circumstances, our valuations save money and time for our clients and point to business areas that can be potentially optimized to increase a future sale price.
If a potential buyer approaches our client and there is not a previous motivation to sell, our clients have the upper-hand to take advantage of unexpected opportunities, or to refuse on offers without disturbing daily operations. Our valuations enable our clients to understand their current position and to choose the right strategic moves.
A realistic valuation is the first step towards obtaining the right amount and type of funds to grow the company, while ensuring a viable, long-term relation with the investor.
In our experience, obtaining funds from a third party investor is usually the preamble of a future liquidity event. A successful sales process requires an effective and motivated cooperation between the original owners and the investor; while an unrealistic valuation may lead to unbalanced relationships between partners.
We provide realistic and up-to-date valuations that pave the road for a profitable cooperation between all stakeholders.
When considering an acquisition, there is a significant risk of paying more than the fair market value. Without a realistic valuation of the target, and the potential synergies the buyer could reasonably expect from its acquisition, the buyer might overpay and potentially destroy shareholder value.
We determine the valuation of the target and potential synergies, enabling our clients to understand the fair market value of the target and the price they might be willing to pay; enabling management to be secure in their decisions and successful in the investment strategy.
An example from the real life
TecnoLite, the largest lighting equipment company in Mexico, decided to acquire one of its main competitors in the market, Construlita. Through RIóN’s valuation, TecnoLite’s Board of Directors was able to understand both the stand-alone value of Construlita and the value of the potential synergies that could be generated from a potential acquisition.
Based on this, TecnoLite presented an attractive offer to the selling parties, while still allowing TecnoLite to generate incremental value for its shareholders.
RIóN provides independent and objective fairness opinions from a financial perspective, providing guidance for key decision makers requiring a third-party examination of an acquisition, merger, divestiture or takeover, and in the situation where a fairness opinion is required by regulation.
We are the largest team of M&A experts in Mexico and have experience in every kind of complex change-of-control transactions, giving M&A-advice in more than 125 transactions in all sectors.