As a standard and integral service within any of our M&A and privatization services advisory mandates, we provide expert company and asset valuation services and fairness opinions to buyers and sellers of companies and assets.  As a key component of these services, we develop business and asset valuation models which we use to assist our clients in determining the appropriate valuation ranges that they should accept (as a seller) or the appropriate bid valuation ranges that should be paid (as a buyer).  In addition to developing business and asset valuation models as standard element of our M&A and privatization mandates, we can also provide independent valuation services to any public sector or private entity (whether prospective buyer or seller) within the sectors that we cover, including: infrastructure, energy & utilities, oil & gas, industrials and real estate.  Of course, we can also provide independent fairness opinions with respect to trades already executed.

We use a multi-tiered approach to company and asset valuation.  The most comprehensive valuation approach is the discounted cash flow (DCF) methodology.  The other comparator valuation methodologies include: precedent comparable transaction acquisition price to EBITDA multiples and enterprise value to EBITDA ratios of comparable publicly traded companies.  Additionally, in cases where a company or asset may have multiple business lines or various revenue-generating elements, we also utilize a "sum-of-the-parts" valuation methodologies.  The following summarizes these various valuation methodologies

• Discounted cash flow (DCF) methodology.  The DCF valuation methodology entails building out a detailed financial model (revenue cash flow model) of a target company or asset.  The net present value (NPV) of the after-tax free cash flows (FCFs) over the expected hold period of the company or assets, together with any terminal value assumption, are discounted at an appropriate equity discount rate (equal to the client's expected after-tax equity rate of return) are then used to determine the equity value, which are then added to the modeled outstanding debt amount to determine the enterprise value.  The modeled debt amount is typically equal to the currently outstanding corporate/asset debt amount, but to the extent that any levered financing or debt refinancing /restructuring is contemplated by the buyer, this will also be taken into account in the valuation model of the buyer.  In most cases, where we are providing also providing M&A or privatization advisory services for our clients which scope typically include development of a comprehensive financial model (CFM).  A CFM is the ideal basis for use to derive a DCF valuation model.  However, in the case that developing a DCF has not been part of our mandate, we can still develop a DCF valuation model based on sufficient prior modeling and reliable data provided by the client.

• Comparable transaction multiples methodology (if applicable).  Transaction comparable multiples methodology involves the subjective assessment of similar precedent M&A transactions.  Assessing what is or what is not a similar transactions is very subjective, and is generally based on sector, region, size, time period and other similar characteristics.  Not all transactions will have credible transaction multiple references.

• Comparable publicly-traded multiples methodology (if applicable).  Publicly traded company multiples methodology involves the subjective assessment of similar publicly traded companies or assets.  Assessing what is or what is not a similar company or asset is very subjective, and is generally based on sector, region, market cap other similar characteristics.  Not all transactions will have credible company multiple references.

• Sum of the parts methodology (if applicable).  In cases where we are valuing companies that are involved in multiple sectors and industries or assets having diverse income categories, we may also apply a "sum-of-the-parts" valuation methodology.  Under this methodology we value the independent business lines or asset categories under the various methods above.  The summation of those discrete valuations becomes the "sum-of-the-parts" valuation for the entire company or asset.

In general, the DCF valuation methodology serves as the driver or valuation and the other 2-3 methodologies are used as confirmatory metrics to ensure that the DCF valuation remains within the bandwidth of other market metrics.

We individually custom-build each and every one of our valuation models using standard Microsoft® Excel® software in a the most user-friendly manner possible.  

In addition to developing, updating and maintaining our own valuation models for our client advisory mandates, we also provide model review and audit services of valuation models produced by our clients or by another third-party model developer on behalf of our client.  Model review and auditing services are often required by our clients (as an independent review or audit) in other transactions that DCS is not otherwise a party to.

DCS advisors are able to provide valuation models on a stand-alone basis on behalf of public and private sector clients who have mandated us to provide transaction advisory and/or M&A or privatization advisory services.  In most cases, as valuation modeling services will be only one element of a larger project delivery program, DCS will also be providing other complementary services in relation to other transaction elements.  Our preference is always to provide such comprehensive advisory services and coordinate all elements of the transaction, including valuation modeling services on behalf of our clients.

Under any valuation modeling services mandate, DCS will draw from our vast global network of veteran industry expert advisor affiliates and our relationship consultants in order to assemble the most appropriate team to match the specific needs of the transaction at hand.  This will always include leadership of DCS affiliate experts who possess decades of global transactional experience related to the specific sector and transaction type.  In any valuation modeling services mandate, our preferred role is always to serve as the lead project/program manager.  Within this role we are also able to assist in the selection and procurement (or subcontracting) and management of other advisors, including local and international legal, technical, economics, commercial/operational and other specialized advisors or other specialized advisors, as the specific transaction may require.  To the extent that other third-party advisors are required, there are many value added advantages of allowing DCS to assist in the procurement of these advisors.  First, DCS expert affiliates themselves possess many of required legal, technical, economics and managerial skill sets and we are best positioned to determine which additional outside third-party skill sets are required and which firms or individuals should be hired in these roles.  Secondly, financial modeling is a very complex undertaking, requiring the management and coordination of many simultaneous workstreams.  DCS advisors are experts inproject and program management services and are ideally suited to manage and coordinate a multi-dimensional advisory team most efficiently and effectively.

Complementing our valuation modeling services, DCS advisors offer the following complementary advisory services that may be applicable, dependent on the specific needs of our client.

• Economic and Market Models
• Comprehensive Financial Models
• Sponsor and Lender Case Financial Models
• Bid Evaluation Models
• Training & Capacity Building Models
• Transaction Advisory
• Capital Fundraising Services
• Tender Management: RFEI/RFQ/RFP
• Mergers & Acquisitions Advisory
• Project/Program Management
• Contract Drafting & Negotiation
• Strategic Planning
• Feasibility Studies
• Workouts and Restructuring
• Corporate Governance
• Training and Capacity Building Workshops

DCS experts provide valuation modeling services in the following sectors that we specialize in.  Please click on the below links to learn more about the sectors that we cover:

• Infrastructure
  • Transportation
  • Water & Wastewater
  • ​​​Solid Waste
  • Social Infrastructure
  • Telecommunications

• Energy & Utilities
  • Generation
  • Sales & Supply and Trading​

• Industrials
  • Engineering & Construction
  • Technology
  • Logistics, Cargo & Freight
  • Heavy Industries

• Oil & Gas
  • Upstream
  • Downstream
  • Midstream

• Real Estate
  • Warehousing and Logistical
  • Commercial and Mixed-Use

DCS experts provide valuation modeling services to the following categories of clients:

• Developers/Sponsors/Concessionaires
• Investors
• Corporations
• Governments/Governmental Entities
• Contractors/Vendors
• Lenders
• Utilities
• Regulators
• Investment Banks
• International Financing Institutions
• International Agencies

financial modeling, review and audit services

business and asset valuation models

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