• Corporate Finance

Corporate Finance

Company evaluation and business planning

In the course of the life of enterprises, the market value typically appears rarely, mostly in connection with a special event - such as a share purchase agreement, capital increase, in-kind contribution - objectively.

The market for shares and stocks is rather narrow, with few players involved (often a seller is opposed to some potential buyers), so there is rarely enough information available for valuation.

Businesses are unique and complex “products,” so their pricing is influenced by a huge number of factors, such as: future cash-flow generating capacity, existing contracts, quality of management, risks from past operations, available assets, to name a few.

Company valuation requires special expertise. We estimate the market value of companies using one of the most accepted methods, or a combination of them, according to international standards: discounted cash-flow (DCF), comparative company valuation or asset value methodology.

Contact: Fekete Márk [email protected]

 

Due diligence

Before acquiring a company, the prospective owner typically wants to ascertain the business, legal and tax risks of the target company. The due diligence team of BDO Hungary's financial advisory business, supplemented by a partner law firm and tax specialists, scans the company from business, legal and tax aspects. The risks identified during the due diligence form the basis of the purchase price negotiations, the future responsibilities of the management and the expectations placed on the management, and help to avoid future legal disputes.

During the due diligence, all contracts of the company, employment contracts, loans, tangible and intangible assets, inventory value, value of real estate and other assets, as well as litigation and other legal matters, as well as tax risks of the target company are examined. Thus, screening material often points to suboptimal practices and procedures to be developed

Contact: Fekete Márk [email protected], Török Bálint [email protected]

 

Refinancing

Involving various bank, institutional, or possibly private loans in financing a business is a task that requires special knowledge. As an expert and consultant, we monitor the financing of many companies and maintain regular contacts with almost all financiers. We know the movements of the banking system, the trends, the current lending activity of each bank, the preferences and the conditions for successful financing needs.

In addition to the analysis of the available resources, we consider it equally important to correctly determine what type of loan or loans the company needs. We professionally prepare the financial needs of our clients, translate them into the language of the banks and ensure that the information required for the loan application is available on time.

We recommend that our clients compete with financial institutions and provide them with support. We help you negotiate, navigate the complex terms and conditions of loan agreements, and finalize contracts. If necessary, we will follow the process all the way to the borrowing and we will also participate in the regular bank contacts that follow.

Contact: Fekete Márk [email protected], Börcsök Péter [email protected]

Reorganization and crisis management

Sometimes there is no other solution than to completely transform the previous operation of a given business in order to stay afloat. Emotionless and quick decisions are needed during such reorganizations. There is an extremely high price to pay for any delay and there is no room for error. You need to know the legal options and live with them.

It is necessary to know the position of customers, suppliers, financiers, what they are willing to do in order to reach an agreement and succeed in crisis management. It needs to be negotiated hard and consistent in implementation.

Contact: Fekete Márk [email protected]

 

Company restructuring

In the course of our business experience, we encounter in many cases a situation where it is expedient to transform a company or group of companies.

Typical cases are:

  • Separation of the assets of a holding company with several owners;
  • Mergers following a takeover of a loan;
  • Outsourcing of business lines;
  • Separation of real estate from the business;
  • Creating clean business by separation for proper risk management.

Transformations are typically long-term (5-7 months) processes, during which there are many opportunities to achieve other business goals in addition to the main goal. We recommend that the coordination of the necessary audit, accounting and legal work be carried out by an expert, in order to ensure that the process runs smoothly and that the business goal is not lost sight of for a moment.

Contact: Fekete Márk [email protected]

 

Project evaluations

By project evaluations, we mean evaluating a business opportunity that is not yet working in order to cut into it. Typically, such are the business opportunities that promise results after the implementation of some new investment, start-ups, or even the launch of a new product.

Project evaluation requires the competencies used in both company evaluation and business modelling. However, building and evaluating a business model for a project that has not yet been proven in the market requires special knowledge. There are no historical data sets or financial information from competitors available for comparison.

In such a situation, the expert should conduct the market research himself, develop the correlation system of the possible business model, and find the best estimation procedures for each key indicator. It is an extremely unstructured task, which is why we love it.

Contact: Fekete Márk [email protected]