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Valuation Fundamentals

2 Part Course  |  A thorough and practical introduction to valuation fundamentals

Non-UK Domicile Status Training Course

A one-day course presented in two half-day live webinars

This course is a ‘must know’ for;
  • Practitioners new to M&A and business valuation, seeking a closer understanding of the principles and practice of valuation, and how the principal valuation methods are applied in practice; and
  • Family business advisers working with SME owners who are considering a sale, but lack understanding of the basis of valuation
And a ‘nice to know’ for;
  • Legal and other advisers seeking a greater understanding of the financial adviser’s role.

  • Practical workshop by an experienced trainer, a corporate financier with over 30 years of capital markets and corporate finance advisory work.
  • Trainer’s experience includes valuation of businesses at all stages of development and in all forms of transaction: growth capital, IPO, M&A, distressed sales.
  • Comprehensive valuation material covering all the fundamentals of valuation, from basic through intermediate level.
  • Step-by-step Excel models illustrating key concepts.
  • Delegates are encouraged to bring their own equity valuation challenges to discuss and debate during the session.
  • Analysis is key – but valuation is an art as much as a science – the areas where judgement is paramount will be made clear.

  • The participants are introduced to the main equity valuation methodologies.
  • The participants start with an overview of valuation fundamentals, where the intellectual framework and the different valuation methodologies are discussed.
  • The differences between Enterprise Value (EV) and equity value are explained in detail.
  • The participants will then look at the Discounted Cash Flows (DCF) and specifically at computing the Free Cash Flows and the Weighted Average Cost of Capital (WACC), to understand how valuation by DCF is undertaken.
  • Lastly, the participants will review the application of comparable trading and transaction multiples, compute several EV and equity multiples and be introduced to why the market applies different multiples to apparently similar companies.
  • Exercises, case studies and worked examples throughout

Part One

The session lays the foundations to build a solid understanding of corporate valuation principles, in the context of mergers, acquisitions and capital markets. The most common valuation methodologies are introduced, together with the underlying theory. The concepts of enterprise value and equity value are explained, using simple but rigorous exercises. Finally, the basics of multiple valuations and discounted cash flow valuation are introduced. Case studies are used throughout the session based on real European companies. 

1.Valuation fundamentals

  • The importance of valuation in corporate finance
  • Valuation theory and framework: Three fundamental approaches
    • Assets
    • Earnings
    • Market
  • The basis for calculating the present value of future money
  • Application: Overview of the major valuation methods
    • Discounted cash flow analysis
    • Trading comparables analysis
    • Transaction comparables analysis
    • Net assets and other ‘industry’ metrics
  • Derivation of enterprise values using a fundamental valuation approach
  • Early-stage businesses: valuation in the absence of profits
  • Enterprise vs. equity value
    • Understanding the difference
    • The components of the ‘bridge’ between the two
  • Case Study I: Equity bridge – exercise and worked example 

2.Discounted Cash Flows

  • Presenting unlevered free cash flows as a basis for business valuation
    • Components and drivers of cash flow
  • Discounting future cash flows: methodology
  • Calculating the weighted average cost of capital
    • Optimal capital structure using peer analysis
    • Establishing the company’s cost of debt
    • Cost of equity: understanding the risk-free rate, the equity risk premium and beta
    • Unlevering and relevering the beta
    • Calculating WACC – case study
  • Case Study II: We will introduce the valuation of a diverse, multinational company in the oilfield services industry, with emphasis on the calculation of WACC
  • Calculating the terminal value
    • Perpetuity growth (Gordon Growth Model) method
    • Exit multiple methods
  • Building a discounting model
  • Mid-year adjustments
  • Calculating enterprise and equity values
  • Sanity checks
    • Reinvestment rate and ROIC
    • Implied multiples and growth rates
    • Percentage of value in the terminal period
  • Calculating value via DCF – case study
  • Case Study III: Perform a DCF on a broadcast satellite business, taking presented cash flows and understanding the sensitivity of the valuation to key inputs – WACC and terminal value

Part Two

3. Comparable M&A Transactions (‘CoTrans’)

  • Difference between trading multiples and multiples from precedent transactions
  • Selection of transactions and information gathering
  • Issues with sourcing data: which period’s EBITDA?
    • Example to illustrate the importance of insight
  • Control premium and synergies
  • Practical issues with transaction comparables
  • Analysis and summary output
  • Case Study IV: Valuation of a control transaction in the healthcare services industry: assessing control premium. 

4. Comparable Market Traded Companies (‘CoCos’)

  • Screening companies to identify a suitable comparable set
  • Review publicly available data (including from databases) on the comparables
  • Issues in assessing the data:
    • Cleaning non-recurring items from earnings and resulting tax adjustment
    • Calendarization issues
    • Last-Twelve Months (LTM) analysis
    • Outliers
    • Calculating a range of forward-looking and historical earnings multiples
      • Revenue
      • EBITDA
      • EBIT
      • P / E
  • Determining an appropriate range
  • Calculating the company’s value
    • Enterprise value
    • Net debt calculations, other possible adjustments e.g. minority interests, JVs, equity method investments
    • Fully diluted: number of shares and value of share options
    • Equity value per share
  • Where a business has several divisions
    • Sector-specific multiples
  • Troubleshooting and checking the output
  • Applying the results
  • Case Study V: Fair valuation of a soft drinks business. We will identify a broad peer group, and the most appropriate comparables. From the range of multiples observed, which will also include transaction comparables, we then perform a multiples valuation analysis based on EV/Sales, EV/EBITDA and other key metrics. 

5. Sum of the parts

  • Understanding a situation where all methods are applicable
  • Case Study VI: ‘Sum of the parts’ valuation of an oilfield services group 

6. Conclusion

  • Review of all material, key messages and key learnings
  • Revisit case studies as necessary
  • Opportunity for discussion

The trainer has worked on corporate finance and capital markets transactions for over thirty years, holding positions on the client side as well as leading advisory teams.

At the Department of Energy, he was a civil servant involved in the privatisation of British Gas, a global IPO involving a large advisory team. He also spent two years (1990-92) in the Hungarian Government privatisation agency working with many advisory firms, as the changing political environment triggered massive ownership change. He has worked in major investment banks (Swiss Bank Corporation International – now UBS - and Lazard) and also co-founded a successful M&A advisory boutique firm. In 2021 he retired from KPMG, where he spent 13 years in the firm’s global M&A business, based in Scotland.

His experience combines a broad range of M&A and equity transactions in North and Central America, Asia Pacific, and all the major European countries, plus, most recently, in Africa. His courses draw deeply on case studies from transactions he has run, bringing practical examples to set alongside the theory.

This course is a practical workshop by an experienced trainer, which will give you an initial approach to value businesses using the most common valuation methodologies including Discounted Cash Flows, Comparable Transaction and Comparable Quoted Companies multiples, concluding with a case study which applies all methods to the divisions of a large, diverse business.

  • Tutor was excellent. He explained things well and went at a good pace. I also felt we covered a decent bit of ground in the short time. Overall very good overview of the valuation fundamentals.
  • The trainer was very knowledgeable and happy to answer questions. The course was excellent.
  • In such organizations, the value of the course is directly related with the technical depth of the instructor and how he passes the knowledge to audience, and as such, I believe that the trainer, and Redcliffe have met this expectation. 
Number of places:
Part 1
Number of places:
Part 2

£695.00

Per participant per part
Discounts available for multiple place booking find out more
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