Helping a company double their valuation

How can the valuation process help companies boost their market value?

Advisors M.E. has worked with many companies in the Middle East to increase their valuations. A forward-looking company came to us recently to ask for some help in improving their valuation, with the intention of selling the business a couple of years down the line. At that time, they valued their company at around USD25 million, but when we’d finished working with them we helped them sell shares in their company for USD55 million – more than double the original valuation!

So how was this done?

At Advisors M.E. we realize that maximizing value is a very different concept to simply maximizing profits, requiring a more holistic approach, and a little forward planning too.

Over a period of 18 months, working alongside the management team, we:
• Suggested a store expansion program
• Assessed their cost structures
• Helped them streamline their working capital, and
• Reviewed their stock management arrangements.

All this created a positive impact on their cash flow. We also helped to restructure their balance sheet.

A contributing factor in creating a successful deal for both parties was a new bonus structure for the current owner-managers, to reward them for exceeding their projections after the business had acquired new shareholders.

We ended up with a very nice enhancement in their value and a final deal that both owners and investors were happy with.

 

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