The inaugural meeting of the BM&A and EACVA company valuation working group took place in Munich on January 31. Around 50 participants met at the offices of Rödl & Partner to discuss topics relating to company valuation and purchase price determination.
Prof. Dr.-Ing. Kai Lucks (Chairman of BM&A) gave an exciting insight into the many different situations within an M&A process for which company valuations are prepared and how the gap between the purchase price expectations of buyers and sellers can be closed, for example by taking synergy potential into account. Stefan Herrmann (Partner, Rödl & Partner) addressed the different perspectives that M&A advisors and auditors can adopt in the context of M&A transactions and the differences that can exist between prices and values. He also presented how purchase price clauses in company purchase agreements are usually structured and how the results of due diligence are taken into account in the purchase price determination.
Christian Plath (Partner, EY) took the participants on an exciting journey into the evaluation of new business models in the age of digitalization. He highlighted the extended requirements that the transformation of business models through digitalization places on valuation. Only a comprehensive view from many angles and the analysis of value, cost and risk drivers along the value chain will lead to success. Mr. Plath also showed how the success of a transaction (e.g. by monitoring the implementation of synergies) should be tracked afterwards using a dashboard.
Professor Werner Gleissner (CEO, FutureValue Group AG) impressively described the requirements for a transaction-oriented valuation and its documentation for management boards, supervisory boards and managing directors from a compliance perspective (Business Judgement Rule in accordance with Section 93 AktG). Another focus of his presentation was the appropriate consideration of opportunities and risks in the company valuation (rating, insolvency risks, etc.) and how a transaction can influence the risk-return profile. His conclusion: There is a great need for action in order to use the various methods of company valuation (which have been developed in recent years) as efficiently and appropriately as possible for the purpose of valuation in the context of M&A projects.
In the next meetings of the working group, these various topics will be addressed in order to develop a practical guide for company valuations in the context of transactions. Interested parties who would like to actively participate in the company valuation working group are cordially invited to contact the BM&A office (verwaltung@bm-a.de).
Article written by Stefan Herrmann
