Business valuation by independent vendor

searcher profile

July 25, 2021

by a searcher in San Francisco, CA, USA

I am reviewing an LoI on a target where the purchase price seems high but broker /seller would entertain valuation report by an independent vendor. Are there any firms / vendor that do business valuation from buyer side ? How much it will cost to get valuation done ? Any searcher who successfully negotiated the price using the valuation report ?

Thanks in advance.

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commentor profile
Reply by an intermediary
from Naval Postgraduate School in Bellevue, WA, USA
I would start by calculating adjusted EBITDA (or EBIT if capital equipment intensive). I would then calculate the resultant multiple and compare to the BVR multiples available from this website. If the buyer is asking a significant premium, I would show him the numbers and challenge him to get his own valuation to prove otherwise. I would also check with an SBA banker (such as Lisa Forrest at Live Oak ) for her opinion (if it’s not bankable, it’s not saleable).
commentor profile
Reply by a professional
from Bentley College in Miami, FL, USA
I can't speak to how a valuation report would impact the negotiation but there are many ways to get the report done. Accounting firms, valuation consultants, independent financial analysts should be able to help you prepare this. Feel free to submit this project through DueDilio and we'll provide you with a few options. https://www.duedilio.com
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