L: IBs do that kind of stuff all day. As i said earlier, there are a variety of approaches, each potentially valid. In a takeover and IB opinion context, the IB usually uses at least three approaches: DCF, comparables (bbased on multiples of earnings, revenues or cash flows) and market (*sometimes based on comps.) They then often ad a factor for a "control" premium. As to strategic valuation, that game involves saying the company has unique value, allowing the acquiror to pay a higher multiple, or strategic premium. Thus, wcii is worth a lot more to , say, wcom, then to colgate. Plus, in valuations, IBs will also put it "savings". E.g., an acqiuror's lower capital costs will be factored into a reconstructed pro forma balance sheet. Basically, from what I've seen, you can justify just about any valuation, depending on whether you're defending a target or prowling for prey. One federal judge has said "a PHD may be found to swear to anything, no matter how false or foolish"
Sorry about all the typos, too burned to correct |
