Getting valuation in restructuring right

Carrying out the valuation of a business that’s in restructuring can be a delicate matter. It can be hotly contested by creditors and shareholders concerned about their investments. The detrimental economic impacts of the global pandemic have further increased the complexity of valuation issues as companies are still finding their way through the consequences of the pandemic.

The valuation process can be even more challenging when the business is in distress, as is often the case. There are likely to be big question marks around whether the attempted turnaround will be successful. In this instance, some adjustments may need to be made to how the value is assessed. What’s the position of the borrower? Why is the business in distress? How does the market rate the chances of its turnaround?

A robust, commercial, sector aligned assessment of the business and its key drivers is the key input to any valuation in such complex scenarios. We develop a strong understanding of the business itself and its positioning in the market, and triangulate these insights with our in-depth industry and M&A expertise, arriving at the valuation which is independent, supported by commercial judgement and sector insights and can stand scrutiny by courts, companies and creditors combined. All that means you can trust our judgement when valuing your business.  

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Our valuation services

Strategic options review

You’re conducting a strategic options review. How do you determine the impact of different options on your business? It is essential to understand the value component created from the potential strategic options in order to make a robust and supportable decision for the business going forward and help facilitate a restructuring plan. We understand the importance of such valuation, and in particular for it to be reflective of any sector and business specific circumstances, rather than solely relying on quantitative valuation concepts. We bring breadth of practical experience in performing valuations for a variety of scenarios including significant strategic repositioning of the business, complex turnaround strategies targeting variety of exit options, considering different tranches of stakeholders and their respective contributions and exit options etc. 

Valuation of assets

Is part of your business facing a wind down or is liquidation the most likely option in a formal restructuring process? Our well-established KPMG's global network of local real estate and PP&E experts provide insight on market data and help establish a robust and commercially supported valuation. An in-depth experience in valuing Intellectual Property and access to the respective tax and legal experts will identify and focus on those assets that could provide significant value. Often complex debt instruments require extra valuation considerations, whether during or after the formal restructuring – our team of valuation experts in complex debt instruments aim to work closely with our Debt Advisory practice is designed to provide robust and supportable valuations. 

Formal valuation opinions

Whether in the context of the requirements of the SIP 16 disclosure for pre-packaged administrations, Scheme of Arrangements or the recently enacted Corporate Insolvency and Governance Act 2020, valuations stand at the heart of the final restructuring decision. The need to develop a robust, impartial, and commercially sound valuation view is the key input into such a complex process. We bring a combination of restructuring, valuation and dispute expertise and help you establish robust valuation positions and carefully consider the recent challenges and uncertainties caused by the global pandemic.

Valuation in disputes

Transactions during a restructuring project can lead to commercial disputes. The valuer may need to defend their valuation in court against a valuer appointed by dissenting creditors. Therefore, our valuations are based on solid principles and are conducted from an independent position rather than adopting an advocacy role. Our valuation experts bring in-depth industry and other relevant knowledge that are essential in conducting a robust and supportable valuation. We work hand in hand with our Forensic and Litigation colleagues who are experienced in providing evidence as an expert witness and range of dispute resolution processes.

Talk to our valuation experts

Are you planning a restructuring project? Want to understand the value of your business? Please contact our experts and find out how we can help.

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