Business Valuation and Corporate Finance
Entrepreneurs regularly have to deal with major financial decisions, e.g. a major investment or the acquisition or sale of a company. For these kinds of issues, assistance and support involving more than just a valuation report is useful. We can give you the best possible help with our specialised Valuation Services team. Our valuation specialists are very broadly trained and are for the most part registered accountants and/or tax specialists.
Below are a number of examples for which Valuation Services can provide support.
Many entrepreneurs are not fully aware of how the value of a company is determined. They often focus mainly on the balance sheet and the profit and loss account, or on money spent in the past. But it is much more important to look ahead. After all, buyers buy in the future, not in the past.
A valuation provides an additional insight into your business and its value. We not only consider returns, but also the transferability of those returns to the buyer. In addition, risks and dependencies also play a key role in the valuation. A valuation gives you an insight into the company’s potential for improvement and ensures that you are perfectly prepared when the company is sold.
Every entrepreneur wants to increase the return on his company, but this does not automatically increase its value. Value management focuses on value creation. It maps out the current value of the business. The development potential, or the future potential value, is also highly important here. When carrying out value management, we consider your current and desired final situation together with you. We not only include returns, but also business risks, the optimum tax structure and legal risks. After mapping out the current situation, we draw up a plan together with you on how to achieve the desired situation. As our advisers are very broadly trained, they can assist you perfectly in this process.
In case of a divorce, the property – which may include shares in a private limited company and/or an interest in another entity – is divided up between the (former) spouses. Our team can provide support as a party-appointed expert to assess the value of the shares.
Major investment decisions can have a huge impact on your business. It is therefore important to maintain a clear view of the extent of the risks and the expected return on the investment and the company as a whole. Our team can support you, for example, by performing calculations for various scenarios, mapping out the sensitivity of the cash flows or by helping you interpret the figures and results.
The busy current situation, the multitude of (possible) future problems and complex issues often lead to business succession being postponed. This can have negative consequences if business succession has to be initiated in a hurry. The continued existence of the company could even be at stake if no suitable successor is found on time. The mutual contact between stakeholders could also be put under pressure in case of a hurried process. Arranging business succession in a timely manner creates clarity and peace of mind for the future.
For business succession within one’s own family, the tax authorities require the shares to be sold at a commercial price. Here it is important to prepare a solid valuation report. Our broadly trained advisers can help you with the entire business succession process. We can support you with matters such as setting up a plan for the business succession (how and when), preparing the valuation, arranging matters with the tax authorities and setting up a funding structure.
Large groups of companies have to deal with internal price agreements. The EU requires prices to be passed on internally based on the ‘arm’s length’ principle. Our team can provide support in preparing a solid justification of internal transactions and in determining a commercial transaction price. Combining knowledge of corporate finance and tax-related expertise allows our team to find the best possible solutions.
Financing structures and participation schemes
When private equity companies acquire a company, this is largely financed with debt and cumulative preference shares. The managers usually participate with ordinary shares. If it turns out that the return on the profitable part of the capital is (too) low, a large part of the upside will shift to the ordinary shareholders. The tax authorities can quantify this profit as salary. This has unpleasant consequences for income tax. Our Valuation team can help you determine and substantiate a commercial return on profitable capital towards the tax authorities.
About PKF Valuation Services
The goal of PKF Valuation Services is to become the number one knowledge centre for SMEs in the Netherlands in the field of business valuation. We have laid solid foundations for this with the current composition of our team and its associated knowledge (five Registered Valuators). Our close ties with TIAS University and the NIRV ensure that we can easily access new developments in the field of valuations. The arrival of Joy van der Veer, one of the leading figures in the field of Valuation in the Netherlands, at PKF Wallast already constitutes a major step towards achieving this goal.