1 / 14

Valuing ESOP Shares

D UFF & P HELPS, LLC. Valuing ESOP Shares . Presented by Lee Bloom. 18 th Annual Ohio Employee Ownership Conference. Akron, OH April 16, 2004. Overview of Valuation Components. Enterprise Value. Add: Cash and Non-Operating Assets. Less: Debt and Contingent Liabilities.

karis
Download Presentation

Valuing ESOP Shares

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. DUFF&PHELPS, LLC Valuing ESOP Shares Presented by Lee Bloom 18th Annual Ohio Employee Ownership Conference Akron, OH April 16, 2004

  2. Overview of Valuation Components Enterprise Value Add: Cash and Non-Operating Assets Less: Debt and Contingent Liabilities Aggregate Equity Value Divide by Shares -> Price per Share

  3. Enterprise Value Company Value Total Value Value Components Debt Equity

  4. Valuation Basis 130 Control Value 100 Marketable Minority Interest Value 65 Non-Marketable Minority Interest Value

  5. Determining the Value Valuation Conclusion 6 Assess Valuation Methods Apply Valuation Methods 5 4 Analyze Historical Performance 1 2 3 Project Future Performance Analyze the Industry

  6. Valuation Methodologies • Comparable Companies • Discounted Cash Flow • Comparable Transactions • Asset Values • Liquidation • Final Analysis - Judgment

  7. Comparable Company Analysis • Valuation based on comparison to publicly traded companies • Analysis of financial performance and qualitative characteristics • Selection of trading multiples • No company will be exactly similar

  8. Typical Valuation Multiples • Equity Multiples • Price / Earnings (P/E) • Price / Book Value • Enterprise Multiples • Enterprise Value / EBITDA • Enterprise Value / EBIT • Enterprise Value / Revenues

  9. Risk Factors • Relative Size • Breadth of Customer Base • Diversity of Product Offering • Diversity of Geographic Footprint • Leverage

  10. Growth Factors • Industry Outlook • Reinvestment Requirements • Acquisition Strategy • New Products • Leverage

  11. Discounted Cash Flow Analysis • Project future cash flow generated by the company • Discount cash flows to the present at an appropriate discount rate • DCF analysis captures company specific assumptions, making it a very robust analysis

  12. Project Future Performance • Revenue growth • Operating margins • Working capital needs • Capital assets needs • Risk adjusted discount factor

  13. Information request • Due diligence meetings • Analysis • Presentation of preliminary conclusions • Final conclusions • Final documentation Typical Valuation Timetable Week Valuation Activity 0 to 1 1 to 3 3 to 4

  14. DUFF&PHELPS, LLC Lee S. Bloom Managing Director DUFF&PHELPS, LLC 311 S. Wacker Drive, Suite 4200 Chicago, IL 60606 (312) 697-4680 Lee.Bloom@duffllc.com www.duffllc.com

More Related