Business Valuation

Business Valuation

The business and legal communities rely on accurate and reliable business valuations in various contexts such as shareholder agreements or disputes, mergers, acquisitions and divestitures and transaction support.

Gaining solid valuation advice can help you make smarter, more informed decisions on everything from buying or selling your business to succession planning to assisting with shareholder dispute resolution. The chartered business valuators at High & Wide Financial, combined with our extensive network of specialists, can provide you with independent, concise assessments in a wide range of areas.


Buying a Business

When you plan to buy a business, with our “Due Diligence” services, we will examine the last few years’ financial statements of the business you intend to purchase and provide you with a realistic estimate of the valuation. We can advise on:

  • What is a fair price for the business?
  • How should the purchase price be divided between the different assets you are acquiring?
  • If it’s an incorporated business, should you buy the shares of the company or just buy the assets from the company?
  • How much money your business will need
  • How to structure and finance the deal
  • The income tax implications
  • …and much more.

Our firm has experience with clients in mergers and acquisitions. We are there to assist in the following areas:

  • Due diligence on purchase
  • Review of cash flow
  • Optimization of taxes
  • Assistance in financing
  • Structuring agreements
  • Establishing purchase price
  • Strategies and planning

An in-depth assessment of a business could include some of the following steps:

  • Assessing your needs and situation
  • Research and collecting information
  • Analysis of research and information
  • Preliminary due diligence
  • Value enhancement
  • Problem identification and proposed solutions
  • Valuation
  • Developing a profile
  • Presenting profile and reviewing conclusions with you

You stand to make a better decision on whether to buy any specific business, based on the help we can provide. That means better protection for your investment.

If you decide to proceed, but need additional funding, we can help you present your proposal to the bank.


Selling a Business

Selling a business may be one of the hardest challenges for a business person. It’s very different from selling one’s principle residence where you simply select from a number of real estate agents.

Naturally, attracting the right potential buyer and presenting the business in a manner that maximizes your return are crucial. By answering the following questions, this may assist you in determining your likelihood of a successful sale:

  • Do you understand how potential buyers will value your business and why they would want to buy your business?
  • Do you have a package of information that is likely to arouse interest in buying your business?
  • Have you identified potential buyers most likely to meet your price and other objectives?
  • Do you have the experienced advisors to locate buyers, assist with structuring the transaction and manage the selling process in a confidential manner?

If you answered ‘no’ or are unsure of the answers to any of the above, we can help you. We understand what is involved in selling a business and can assist you to maximize the return and minimize the risks of selling your business.

Many of our clients have discovered that selling their business is much more difficult, challenging and time consuming than when it first appears. Most business owners don’t really know where to go to get assistance in selling their business.

In order to maximize the proceeds that you can receive, we will likely need to introduce you to as many potential buyers as possible. The process can take some time, anywhere from 3 to 9 months, depending on the nature of your business.

Some of the steps and procedures that may be used in your situation could include:

  • define objectives and develop a plan
  • determine a realistic price range for the value of the business
  • determine any synergies, or favourable buyer attributes that would increase the value of your business
  • prepare an information package for prospective buyers
  • market research and identify buyer candidates
  • provide information to potential buyers
  • assist with letter of intent negotiations
  • assist with due diligence review
  • assist with closing the transaction

For some of our larger clients, we have successfully sold their businesses by working with a variety of specialized business brokers who specialize in the sale of ‘large’ businesses.

Tax issues are paramount in selling a business to maximize the after-tax return to the shareholder. We evaluate the various ways of selling a business to determine the most tax-effective overall plan. For tax matters, we:

  • design the transactions required to put the tax planning in place
  • assist with reviewing the legal documentation
  • assist in negotiating the terms of the sale, with particular emphasis on the tax issues involved
  • complete all necessary tax filings and tax elections

We work closely with legal counsel and our business valuators where required. Sometimes, we can minimize tax by incorporating certain international and non-resident tax-planning strategies. We can also suggest creative approaches such as earn-outs, employee-funded purchases, share-for-share exchanges, and sale/leaseback transactions.

Some of the income tax considerations to review in the sale of a business may include the following:

  • Share sale vs. asset sale
  • Capital gains exemption
  • Purification of the company for sale purposes
  • Capital dividend account
  • Receipt of proceeds
  • Retiring allowances
  • Capital gains reserve
  • Allocation of selling price