Summary
- Company type: Designer and manufacturer of marine equipment
- Advisor valued the company at ~4.0× EBITDA
- EverEdge conducted a detailed audit of intangible assets
- Recognised that valuation was not capturing value of brands, distribution channels nor unique product designs – implying significant undervaluation of the business
- Updated valuation explicitly recognised intangible assets
- Outcome: Client sold majority stake of the company at a ~10 × EBITDA multiple
Client Introduction
In preparation for a potential sale, a leading marine equipment designer and manufacturer approached EverEdge for a fresh valuation.
The Problem
The client had previously engaged an advisor who received a valuation of their business at approximately a 4.0× EBITDA multiple. However, the client felt that this did not reflect the commercial potential of its intangible assets.
EverEdge was engaged to conducted a comprehensive intangible asset audit. This assessment identified key value drivers including:
- Industry Know-how and Confidential Information – enabling the development of high-quality, innovative products
- Networks and Relationships – enhancing product capabilities and ensuring strong market access
- Brand – delivering lasting recognition and trust in international markets
The key question was, how could these assets unlock greater value in a sale?
The Solution
- EverEdge quickly recognised that previous valuation was not capturing the value of brands, distribution channels nor unique product designs, leading to significant undervaluation of the business.
Key findings include:
- Brand reputation: The company’s brand position in the market is underpinned by the quality of the company’s products and registered trademarks and web domains that capture brand equity in international markets. This brand reputation could drive preference among both end customers and retailers.
- Industry Know-how & Confidential Information: This provides the ‘secret sauce’ that informs new Product Designs.
- Network of Distributors & Retailer Relationships: This delivers a valuable resource facilitating the delivery of these products into the hands of end-customers.
Results & Benefits
- Incorporating these intangible assets lifted the company’s valuation to a ~10 EBITDA multiple, approximately 2.5× higher than the initial assessment. Intangible assets were shown to account for more than 80% of the company’s total value. This enabled a successful sale of a majority stake to private equity investor, enabling the owner to significantly cash out while retaining upside potential.
- Beyond valuation, EverEdge also assisted owner to address intangible asset risks and strengthen protections, laying a stronger foundation for sustained growth and value creation. Moreover, it also highlighted the role of intangible assets in driving future growth and value.
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