Independent valuers. Every report personally signed.

Every report is signed by the valuer responsible for it.

What Jackson values.

Interests in privately held companies, and the structures that hold them:

• ·100% interests in privately held companies, and specific parcels of shares
• ·Enterprise value and equity value
• ·Minority and controlling interests
• ·Shareholder loans
• ·Goodwill and intellectual property
• ·Corporate groups: operating companies, holding companies, trustee companies and trusts
• ·Related entities and complex ownership structures

Each valuation works from the evidence: financial statements, management accounts, income tax returns, general ledgers, payroll records, balance sheets, working-capital information, loan accounts, shareholder registers, company constitutions, shareholder agreements, ASIC records, contracts, leases, franchise agreements, intellectual-property records, customer and supplier data, forecasts and budgets, management representations, and other documentary evidence relevant to the value of the business or company.

What a company valuation considers.

Not merely reported accounting results, but the economic characteristics of the business and the extent to which a hypothetical market participant would recognise them:

• ·Earnings: sustainable earnings; maintainable EBITDA and EBIT; earnings normalisation; proprietor remuneration; related-party expenses; non-recurring expenditure; abnormal income and expenses.
• ·Balance sheet: surplus assets and surplus cash; net debt; working capital; shareholder and director loans; contingent liabilities; capital expenditure requirements.
• ·Revenue and dependence: customer and supplier concentration; key-person and owner dependence; recurring and contractual revenue; intellectual property.
• ·Risk and tenure: regulatory risk; lease obligations; franchise tenure; business-specific risk.
• ·Goodwill and the interest valued: personal and transferable goodwill; control and minority interests; and the distinction between enterprise value and equity value.

Methods.

The conclusion is determined from the available evidence, the economic circumstances of the subject company, the appropriate methodology, relevant market evidence and the professional judgments the engagement requires.

Shareholder and dispute valuations.

Jackson values specific shareholdings in privately held companies for shareholder exits and admissions, buy-outs, ownership disputes, internal transfers, corporate restructures, succession arrangements, related-party transactions and negotiated settlements. Where appropriate the valuation considers the economic and legal characteristics of the particular interest rather than applying a mechanical percentage of the value of the whole company: voting rights, economic rights, dividend rights, control, restrictions on transfer, shareholder agreements, constitutional provisions, liquidity, the existence of shareholder loans, and the commercial circumstances surrounding the interest.

A significant part of the work involves disagreement between shareholders, business partners or related parties: shareholder separations and buy-outs, ownership disputes, contested company values, disputed maintainable earnings, related-party transactions, disputed shareholder loans, alleged personal or non-transferable goodwill, disputed liabilities, differing assumptions about future trading, and disagreement about the appropriate methodology. In these matters the report separates six things:

1. 1Matters established from documentary evidence
2. 2Information provided by management or the instructing party
3. 3Assumptions
4. 4Valuation judgment
5. 5Matters capable of sensitivity analysis
6. 6Matters of law requiring determination by legal advisers or the Court

Where a valuation is prepared for use in proceedings, the reader can identify the precise interest being valued, the valuation date, the basis and standard of value, the source evidence relied on, the adjustments made to reported financial results, the methodology adopted, the assumptions applied, any material sensitivities, and the reasoning leading to the opinion of value. The valuer’s role is to provide an independent opinion of value, not to advocate for a predetermined outcome: Jackson does not accept instructions requiring a predetermined valuation result. Where information cannot be independently verified, that fact is identified. Matters outside the expertise of a business valuer, including questions requiring legal determination, are reserved for legal advisers or the Court.

Valuations for separation and family law proceedings are prepared through our dedicated family law practice, Family Law Valuations.

Industries.

Industry experience includes:

• ·Healthcare: medical centres, healthcare practices, allied-health businesses and other healthcare service providers
• ·NDIS and disability services: registered and unregistered disability-service businesses and related healthcare providers
• ·Professional services: consulting, professional advisory, engineering and specialist service businesses
• ·Property and real estate: real-estate agencies, rent-roll businesses and property-management operations
• ·Franchised businesses: valuations requiring consideration of franchise tenure, franchise obligations, lease terms and transferability
• ·Technology and intellectual property: software, technology, early-stage businesses and intellectual-property-led companies
• ·Engineering and industrial services: engineering, rail, mining services, contracting and industrial businesses
• ·Retail and consumer products: consumer-product companies, brands, retail businesses and businesses supplying major Australian retailers
• ·Trade and contracting: privately held operational businesses with material workforce, asset, contract and working-capital requirements

What a report contains.

A typical company valuation report is structured in twenty parts:

1. 1Instructions and purpose
2. 2Valuation date
3. 3Interest being valued
4. 4Basis or standard of value
5. 5Corporate and ownership structure
6. 6Business background
7. 7Historical financial performance
8. 8Balance-sheet position
9. 9Earnings normalisation
10. 10Maintainable earnings
11. 11Valuation methodology
12. 12Market evidence
13. 13Business-specific risk
14. 14Enterprise value
15. 15Net debt and surplus assets
16. 16Equity value
17. 17Value of the relevant shareholding
18. 18Sensitivities and alternative assumptions
19. 19Limitations and qualifications
20. 20Valuation conclusion

The opinion is a reasoned valuation supported by identifiable evidence and a transparent analytical process, not simply a numerical conclusion.

How we keep every valuation defensible.

• ·Every report is signed by the valuer responsible for it: a named, accountable signatory.
• ·Business valuation is the only service we offer. We are never also your tax agent, auditor or broker.
• ·Reports are prepared with the ATO’s market valuation guidance in mind.
• ·Fees are fixed at engagement and never tied to the outcome: our conclusion isn’t for sale.
• ·Multiple accepted methodologies are tested; we conclude at the most supportable position the evidence allows.
• ·Working papers are retained for ten years, so the file can answer questions if the matter is ever reviewed.

Oliver Group prepares valuations only. We are not a registered tax agent and do not provide tax advice.

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Published with permission. The client asked that their business not be identified. We do not offer inducements for feedback and we do not publish client names where an engagement is commercially sensitive.