Our expertise
Olfin assists small and medium-sized businesses and private equity funds with their financial valuation and reporting needs in various contexts (accounting, transactional, regulatory and litigation).
Valuation of Companies
Our financial valuation work meets professional valuation standards and the requirements of accounting standards and regulatory authorities. Our multi-criteria approach is based on :
- analogical methods based on multiples observed on the financial markets (stock market multiples) and in transactions involving comparable companies (transactional multiples)
- Intrinsic approaches based on the analysis of future profitability and the risk borne by the Company (Discounted Cash-Flows or DCF, Probabilized DCF or rNPV for Biotech, Net Assets, etc.)
- Mathematical approaches for more complex financial assets (real options, recombinant trees, Monte-Carlo simulations)
Transactional context
Commissariat aux apports et a la fusion
Within the framework of operations of contributions, mergers or demergers, we conduct an analysis of the value of the contributions and the fairness of the exchange ratio.
Sale/investment transaction
We assist you in the analysis of the value of your company in the context of a proposed sale or acquisition of a target in order to facilitate negotiations.
Accounting / Reporting Context
IFRS 13 (or"IFRS 13 - Fair value measurement") provides a definition and framework applicable to all fair value measurements, which is defined as "the price that would be received for the sale of an asset or paid for the transfer of a liability in an arm's length transaction between market participants at the measurement date".The IFRS standards applicable to an account balance or transaction should be referred to in order to identify the assets and liabilities to be measured at fair value. For example, IFRS 9 provides a framework for the cases in which the measurement of financial assets is applicable. IFRS 5 provides a framework for the measurement of assets held for sale. There are also examples of IFRS 6, IFRS 3, IAS 19 and IAS 40.
Regulatory Context
Valuation of Private Equity portfolios (AMF)
Support in the valuation of investment portfolios of private equity companies is a major and strategic issue in an increasingly complex economic and financial environment. A rigorous valuation respecting the standards and recommendations issued by the various private equity professional associations (AFIC, EVCA, BVCA, etc.) as well as the International Private Equity and Venture Capital Valuation Guidelines (IPEV Guidelines) is strategic to ensure quality financial information for its underwriters.Our firm is specialized in the periodic valuation of assets for private equity funds. We have a strong reputation in this field through the experience of its founder, Brice Palayer, Independent Valuator of the Siparex Group (a leading private equity firm with an AuM of €3.5 billion). Olifin assists you in the implementation of clear valuation methodologies, the recurrent valuation of your portfolios and the realization of visual data on the performance of your funds.
Fairness opinion
Situations likely to generate a risk of conflict of interest or that could affect the equal treatment of shareholders require the intervention of an independent expert. This is to rule out the idea that shareholders have not been treated fairly. OLIFIN assists you in the preparation of an independent expert report in accordance with the requirements of the regulations of the Autorité des Marchés Financiers (AMF).
Litigation Context
Damage assessment
Olifin assists you in cases of commercial litigation or public and regulatory litigation as well as in the independent valuation of asset portfolios in the context of divorce proceedings.
Independent expertise (1843-4)
In cases where the law refers to article 1843-4 to determine the price conditions of a transfer of a partner's corporate rights, or the repurchase of these rights by the company, the value of these rights is determined, in case of dispute, by an appointed expert. The expert thus appointed shall be bound to apply, where they exist, the rules and procedures for determining the value laid down in the company's Articles of Association or in any agreement between the parties. The expert so appointed shall apply, where they exist, the rules and procedures for determining the value provided for in any agreement binding on the parties.
Valuation of Assets and Liabilities
The valuation of corporate assets and liabilities can take place in the various contexts presented below. It may involve the valuation of brands, patents, goodwill, customer relationships or order books. The classic approaches to the valuation of intangible assets are the following:
- The royalty method is based on the determination of the amount of future royalties (net of costs attributable to the operation of the intangible and net of taxes) that the owner of an intangible would receive if it had licensed the intangible to a third party, over the estimated life of the intangible. This method is generally used to value assets such as brands.
- The excess earnings method is the most suitable for the valuation of customer-related intangible assets (customer relationships and order backlog). The value of the asset is the discounted sum of future excess earnings generated over the remaining life of the asset.
- The cost-based approach involves determining what it would cost to develop the asset (labor and equipment) and earn a reasonable return on investment. This method is often used when the business is in the early stages of growth and forecasting is difficult or when there is not enough information to use the other two methods.
Transactional context
The valuation of intangible assets (goodwill, brand, technologies, etc.) can be used in the context of transactions (acquisition / disposal), legal reorganization or search for financing.
Accounting Context
Purchase price allocation (PPA)
The purchase price allocation (PPA) is a strategic exercise in the context of business combinations. Financial reporting standards (IAS 38 / IFRS3R) require that the purchase price paid be allocated to the assets acquired and liabilities assumed. We assist you in the accurate and reliable estimation of the purchase price necessary to determine the amount of goodwill that is paid in the transaction and the identification and valuation of the identifiable elements of the transaction which may include: the brand, customer relationships, databases or contracts, intellectual property, favorable or unfavorable contracts and contingent liabilities.
Impairment Test
Companies are required to compare the recoverable amount of their assets with their net book value whenever there is an indication of impairment. This is a strategic issue to assess the relevance of financial information in a post-acquisition context. We assist management and audit firms in the preparation of impairment tests (IT) in accordance with the standards in force (IAS 36). OLIFIN can perform IT in three ways: by taking full charge of the impairment tests on cash-generating units (CGUs), by setting up methodological support and/or by assisting in the determination of valuation parameters (WACC, gearing, long-term growth rate, cash flow forecasts, etc.)
Management Package Valuation
Transactional context
The management package is a risk-based incentive system for management performance ("ratchet" mechanism) which generally allows the manager to increase his shareholding in the capital if the company or the funds achieve their objectives ("relutive" system) with a sharing of the capital gain by retrocession. The valuation of management packages is one of our firm's strong areas of expertise, with more than a hundred assignments carried out and a very good knowledge of market practices. Brice Palayer, its founder, has assisted numerous funds in this complex exercise requiring a perfect mastery of mathematical valuation models (Monte-Carlo, recombinant trees). As an independent valuator for private equity funds, he is also able to share best practices in terms of structuring and setting up management packages. We have also developed a data analytics model to visualize the sensitivity of the models to the variation of key valuation parameters.
Accounting context (IFRS 2 / IAS 39)
In the context of the issuance of financial instruments, IFRS 2 requires the recognition of goods or services received or acquired in a share-based payment transaction. In the absence of an available market price, OLIFIN is able to assist you in measuring the fair value of the equity instruments granted by using a valuation technique to determine what the price of these equity instruments would have been on the valuation date in a transaction entered into under normal market conditions, between knowledgeable and willing parties.
Context Litigation
Litigation relating to management packages may arise between the company issuing the incentive plan and the manager and/or the tax authorities. In this context, we assist our clients throughout the exchanges with the opposing party. In this context, we assist our clients throughout the discussions with the opposing party. Our work includes: taking cognizance of the work produced by the opposing party, assisting the lawyers in the preparation of a response to be opposed and finally the preparation of a valuation report based on a multi-criteria approach that can be used against the tax authorities.
Business Modelling & Data Analytics
Reporting Model
The reliability and flexibility of corporate financial information is a key issue in the accounting and financial management of its activity as well as in the implementation of a reliable communication with its shareholders and banks.
Thanks to its experience in this field, Olifin can help you deploy simple, dynamic, flexible and automated data visualization and analytics tools.
We provide innovative solutions for monthly reporting and forecasting necessary for the management of your business and your cash flow. Our models connect directly to your ERP / CRM and your accounting tools.
Financing Model
As part of your search for financing, we help you identify key sector indicators and build analytical financial statements (P&L, balance sheet, cash flow statement and cash flow statement).