ASSESSMENT OF BUSINESS FOR M&A PURPOSE

In the acquisition - merger (M&A) activities of projects, businesses, brands; Price appraisal is a mandatory and most important step for the two sides to have a basis for negotiations. However, the valuation of businesses for M&A purposes in Vietnam has not really been paid enough attention by Vietnamese business owners, leading to disadvantages and passives when mobilizing capital from M&A deals.

1. The importance of valuation in M&A.

In negotiations or negotiations to buy, sell, and contribute capital to an enterprise, the parties often encounter conflicts in determining the exact value of the enterprise as a starting point for negotiation. According to research, up to 70% of M&A deals fail in the first place just because of wrong valuation of the business.

Therefore, valuation in mergers and acquisitions is considered the first step in the entire M&A process. On the side of business owners, valuation helps business owners accurately determine the actual value and development potential of the company to avoid overvaluing or too low, making it difficult to attract suitable investors. me. For investors, valuation plays an even more important role because it helps investors assess the appropriate investment level and feasibility of the M&A deal.

2. Enterprise valuation process for M&A purposes

In general, the valuation process for Enterprises for M&A purposes usually includes the following steps:

• Step 1: Receive required information from business owners/investors

Appraisal units will receive requested information from customers wishing to value properties. Understanding the customers purpose, preliminary about the type, location, age, and size of the business / asset will help the appraiser determine the feasibility of the appraisal for that business. .

• Step 2: Make a valuation plan

​Based on the initial legal information that the customer has provided, the appraisal unit will make a price appraisal plan. The plan clearly shows the steps and implementation time, the requirements to be achieved in the steps.

• Step 3: Field survey, collect information

After completing the appraisal plan, the appraisers/experts will conduct an actual survey at the enterprise and at the same time study the legal documents, detailed reports of the business... with professional skills. to conduct valuation of that business/asset.

Actual survey of enterprises includes: real estate of the enterprise (if any), machinery lines, factories, means of transport, trademarks, intellectual property rights, current and potential customers …financial statements, strategic business plans…So that appraisers comprehensively and accurately evaluate the elements constituting the value of the business.

• Step 4: Build a detailed appraisal report

From the information obtained through the actual survey step, collect information; The appraiser/expert will develop an appraisal report according to the requirements and standards of the Law on Valuation of Vietnam.

•  Step 5: Control

After the appraiser prepares the appraisal report, the report will be transferred to the Control Department to check and re-check the entire form and content of the report including: asset appraisal value, legal information management and technical aspects of the property, customer information, appraisal purposes, appraisal methods, etc., before issuing appraisal reports and certificates to customers. If the report needs correction, it will be sent back to the appraiser/expert for correction. On the contrary, if the report is satisfactory, it will be transferred to the printing and distribution section.

• Step 6: Issuing Valuation Report and Certificate

After the control step, the appraisal report and certificate will be printed, issued and sent to the customer. From there, the official report and deed take legal effect to serve as a basis for determining the value of the enterprises assets to be used for M&A purposes or other related purposes.

3. Cost of enterprise valuation

Enterprise valuation costs for M&A purposes are usually determined by the appraisal units based on % (percent) of the total assets of the Enterprise and the type of business. The second way to calculate the business appraisal fee is a fixed rate (package) agreed between the appraiser and the customer.

4. Reputable Enterprise Appraisal Unit

Hoang Quan Appraisal Co., Ltd with more than 19 years of experience in the field of appraisal with abundant data warehouse, a team of professional, highly qualified appraisal experts, fast and strict appraisal process , minimizing appraisal costs... Besides, SUNVALUE service of Hoang Quan Appraisal will provide customers with information about the value of the business with high reliability for each appraisal purpose.

Capitalize assets with SunValue - A pioneer in digitization of Valuation, the leading real estate database in Vietnam:

- With more than 19 years of experience and a system of more than 40 branches - transaction offices in Vietnam, USA, Australia.

- More than 10 million Real Estate data and more than 5 million customer data...

- Comprehensive & effective solution: Investment, loan, M&A, property valuation,... in Vietnam & USA, Australia

- Ecosystem & network of major partners in valuation & real estate: linking with Financial Institutions with more than 20 prestigious domestic and foreign banks, Financial Fund, Public Administration...

- Strategic relationship with international partners: World Real Estate Association (FIABCI), World Valuation Association (Wavo), Vietnam Valuation Association (VVA),...