There are many times when a company may need to establish the value of a business unit;
prior to acquisition or divestment, before going public with an IPO, for a
minority buyout, etc. The Winbridge Group, Inc. has conducted
numerous valuations for such purposes.
To develop a valuation, Winbridge:
uses an extensive and intensive, internal and external research program to generate an
integrated set of assumptions for the economy, the industry and the business units
market share in that industry; the result is an Optimum, Pessimistic and Most Likely
set of projections for the business unit's revenue over the next five years;
uses historical financial performance data of the company to construct a computer based
model that generates forecasted cash flow as well as a complete set of proforma financial
explores and evaluates a range of financial futures with the revenue forecasts and the
uses a number of techniques, such as the Capital Asset Pricing Model, and the latest
relevant transaction data that is available, to develop a valuation based on the
discounted cash flows projected for the business under the various deterministic
scenarios; we may also employ a Monte Carlo simulation approach to obtain similar
information but with a stochastic process;
correlates the valuation results with a number of conventional valuation methodologies
including P/E, Book Value, liquidation value, P/EBIT, etc. and reaches a
judgment about a
reasonable range of values for the business unit.
This analysis and information is provided by Winbridge to management
in a form that is appropriate for use with the Board of Directors.
Experienced professionals who can conduct a rapid evaluation;
Thorough and comprehensive process for research and analysis;
Well founded valuation that the Board can rely upon for its opinion.
While conducting a Valuation, it is critical to have a team of professionals who have
experience in the process; and knowledge of the industry. Winbridge is composed of a
group of professionals who are highly experienced in working with clients on these types
of engagements. Most of our staff have advanced degrees in business, science and/or
engineering. We know the processes that work and the pitfalls. Our teams
are also skilled in a wide range of industries, technologies and/or functions and bring
these qualities to the client team. Some of the industries we cover include
instrumentation, chemical manufacturing equipment, machine tools, pumps, valves, controls,
precision molded rubber parts, industrial and medical lasers, aerospace/defense systems
and components, weighing systems and components, plumbing fixtures, foundry equipment,
electronic components, laboratory equipment, etc. We have expertise in automation,
manufacturing systems, chemical manufacturing, lasers, rubber/plastic manufacturing and
Due Diligence Process
Valuation is usually part of a due diligence process. The Winbridge Group, Inc.
has conducted numerous evaluations of acquisitions in support of our clients. We
become part of the due diligence team and provide a full range of services. These
services include market research to establish the image of the candidate and an indication
of its competitive position in its industry. They also include the skills and
knowledge to go into an operation and carefully assess its strengths and weaknesses.
It is this experience that allows us to assume the role of a duel diligence team for our
divesting client and perform the pre-due diligence audit.
We have a team of experienced market researchers who are skilled in conducting personal
and telephone interviews with high level professionals. We have found that in most
firms, there is missing, critical information that is key to the formulation of Corporate
Strategic Plans. During our workshop process we identify this missing information
and then put together a program to obtain it. Most of the information is available
from key industry sources. We interview these people either over the telephone or in
person. Occasionally, we will conduct broader based interviews using a variety
of techniques form Focus Groups, to Mail Surveys to large scale telephone surveys.
Winbridge has extensive experience in the construction of financial
models which are used to show the alternative futures of the company. We use the
models, both deterministic and stochastic, to evaluate the alternative financial futures
of the company. The focus is on cash flows, which we discount at a rate determined
by the Capital Asset Pricing Model.