As part of Clairent’s “Beyond the Valuation Black Box” series, Josette Ferrer covered a detailed case study for a valuation related to a pre-IPO company as part of a presentation to the Financial Executives International SF Bay Area chapter in March 2019. Josette’s presentation covered the following, including relevant details for the specific case study:
- Background on relevant tax and financial reporting guidance associated with the project, as well as audit/SEC review considerations
- Review of business valuation methodologies
- General best practices related to all valuations
- Specific pre-IPO valuation considerations – including timing of valuation reports, relevant changes in methodologies over time, and consistency of assumptions
- A focus on the application of the market approach. This included: (i) the guideline public company method – including development of rationale and support for selected multiples (including a detailed comparison matrix for the subject company vs. the comps); (ii) the guideline transactions method; and (iii) a review of pricing associated with recent IPOs.