Summary
- Manufacturing company undergoing valuation
- Invites EverEdge analyst to visit the factory
- Analyst uncovers dozens of intangible assets
- Intangible assets lead to investment
Client Introduction
A promotional products manufacturer asked EverEdge to assist with a valuation in preparation for possible sale.
The Problem
After initially being told by a valuer that the company’s worth was only in its property, tools and cash balance, the manufacturer looked for a second opinion. While it believed this valuation was fundamentally correct, was curious to see if a new assessment would uncover any hidden value.
The manufacturer invited an EverEdge analyst to visit its factory. The analyst immediately noticed a series of screens displaying where each of the workers were presently operating on the factory line, what they were doing, how long they had been there and many other key data points.
The analyst asked if the machines on the factory floor were placed randomly. On the contrary, each machine was strategically positioned based on the greatest efficiency.
The Solution
The analyst identified a stack of intangible asset examples. Everything it did depended on screeds of data, excellent supplier relationships, industry know-how, clever innovation, confidential information, precision software and much else.
To reinforce just how dependent on intangible assets the company was, the analyst asked leadership if they would describe it to potential investors or buyers as, “just a bunch of machines anyone can buy off the shelf.” Or, would they highlight the workforce tracking system and the strategic layout of their machinery?
Results & Benefits
A lightbulb went on across the boardroom as they realised just how valuable the intangible assets they had created were – these assets were the beating heart of the company and where pretty much all the value resided.
Our resulting report not only recognised that the company had hidden value. It also provided more robust reasoning as to where that value lay. As the company went to market, it led its investment memoranda with a list of intangible assets and secured capital from a large merchant bank.
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