Challenges in valuation
Building an accurate valuation of a company involves estimating its long-term prospects using sound methods and approaches. Valuations in M&A transactions always involve subjective analysis and the current market is testing the judgment and skills of experts in this field. Although risk has always had a major bearing on the estimated value of a company, the impact of the global recession has intensified the process.
Arriving at a valuation that satisfies both seller and buyer is quite challenging in the current financial climate. “Sellers continue to believe their companies are still worth pre-economic crisis values while buyers, especially private equity groups, continue to see a lack of quality middle-market companies,”
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