We support market players within the financial services sector by offering our up-to-date interdisciplinary expertise when it comes to all forms of valuation, taking on the role of advisor, neutral expert or arbitrator. Alongside the traditional income approach and the market approach to valuations using "multiples", we also have a range of special methods at our disposal, including the valuation of stock options. The BDO Financial Services team specialises in the valuation of performing or non-performing loans (portfolios and single tickets). M&A transactions will often be the reason why our clients need their company, financial assets, portfolios or intangible assets to be valued.
Valuations during M&A transactions
When undertaking a transaction (buying, selling, merging companies and company units or listing on the stock exchange), it will more often than not be necessary to consider the fair value, the maximum price to be paid or the minimum amount to be received. At the heart of all valuations is a well-founded, future-oriented analysis of whatever is being valued. When we conduct analyses, we are primarily concerned with identifying the factors that are of particular relevance to the value and as such will have an impact on the value and/or the price to be paid (buy side) or received (sell side).
Valuations under legal or contractual obligations
Corporate and tax law requirements can also trigger a requirement for a (business) valuation . Examples of scenarios where this may be the case include a squeeze-out of minority shareholders, company restructuring or a change to the legal form (e.g. to a Societas Europaea). Knowing all about the specific substantive and methodological requirements for this kind of valuation is absolutely essential if a reliable assessment of value is to be performed.
Fairness opinions: contributing to corporate governance
When drawing up a fairness opinion, a transaction price that has been agreed upon or is in the process of being negotiated is assessed to ensure that it is financially reasonable. This process provdes a high level of security for the bodies in a company responsible for concluding the transaction. It has become common practice for a fairness opinion to be obtained for company and portfolio transactions and indeed it is even a legal requirement in some cases. However, this is something that can be considered when making any business decisions that will have a significant impact on a company's asset, financial and income situation.
PPAs and impairment tests
Under the acquisition method, the acquirer of a company recognises the individual assets and liabilities (including self-generated intangible assets and contingent liabilities) of the target company in its consolidated financial statement. All assets and liabilities have to be valued at their fair value as at the acquisition date. BDO’s team of experts is has significant expertise in purchase price allocations (PPAs) and impairment tests in line with the German Commercial Code (HGB) and International Financial Reporting Standards (IFRS).
Valuation of intangible assets
The BDO Financial Services team can also value any intangible assets, such as trademarks, customer bases and technologies, in a process separate from a PPA. This kind of valuation will often be required if transactions involving such assets are being considered or have already been carried out.
Valuation of PL/NPL portfolios and other financial instruments
In a number of situations, we are also called upon to value performing loan (PL) and non-performing loan (NPL) portfolios and other financial instruments including derivatives (such as stock options and interest derivatives).
The BDO Financial Services team is made up of experienced professionals with proven advisory expertise. This is based on active involvement in several valuation-related IDW (German Auditing Standards) working groups, lecturing on business valuation at universities and regular publications and talks on current topics related to valuation.