Business Valuation Services
Intangible asset Business valuations
The Singapore Government views intangible assets as 'increasingly critical in enterprise growth and success'. As a significant global hub and innovation center, it is vital that Singapore-based companies ensure that their intangible assets are included in any business valuation process if they want to realize their true value.
Intangible assets (items such as data, content, software code, company and product brands, confidential information, inventions, patents, industrial know-how and design rights) account for more than 87% of all company value today. They are now the primary driver of company profitability and growth.
Unfortunately, intangible assets are essentially ignored by modern accounting standards. They either never make the balance sheet, are lost under the amorphous term “goodwill,” or are listed at cost (and there is essentially no correlation between cost and value with intangible assets).
Why should I value my intangible assets?
Conventional business valuation methods tend to significantly under-value intangible assets and intangible asset-rich companies.
For example, a recent report from the UK Treasury highlighted that although the world’s five most valuable companies are together estimated to be worth US$4.6 trillion, their balance sheets report just US$225 billion of tangible assets. The other US$4.3 trillion of value is missing in action.
This is also evident in Singapore where a similar scenario occurs when looking at the financial statements of a number of the largest companies in Singapore.
Dr. Bernard Ong, Group Director of Policy & Engagement at the Intellectual Property Office of Singapore (IPOS) states: “Technologies, brands, ideas, data, know-hows and other forms of IA are the primary forces making the world’s most innovative and valuable enterprises. Yet, market understanding of IA, including intellectual property, remains a big challenge to investors and enterprises alike."
This is a major problem for shareholders managers and directors because it means that:
Many intangible asset-rich businesses are significantly undervalued relative to their true value.
Many companies own valuable intangible assets are unaware of them and are unable to leverage them because their financial accounts do not refer to them
How does an intangible asset business valuation work?
Because intangible assets have been largely ignored by accounting standards, intangible asset valuation is an area that remains poorly understood. Many accountants and valuation providers erroneously claim “you cannot value data/ brands/content/patents etc”. This is incorrect.
While more complex than a conventional valuation, there are methods of valuing intangible assets that are reliable, accurate and robust. This is an area that EverEdge's Singapore based business valuation team specializes in.
Modern intangible asset valuation methodologies work from the general principle that a strong intangible asset position delivers enhanced competitive advantage which in turn translates into superior market share or margins and ultimately significantly increases the value of the business.
EverEdge Keystone™ Intangible Asset Business Valuation
Using a proprietary three-factor model, EverEdge’s Keystone™ Intangible Asset Business Valuation methodology utilizes both traditional quantitative methods but importantly also analyzes the Contextual and Qualitative factors. This is critical as these factors are primary drivers of intangible asset value.
This enables both companies and investors to:
Make significantly more informed decisions regarding exits, capital raises, and M&A, JV or license transactions
Better articulate value to potential investors or acquirers to drive increased pre-money or exit values or to potential JV or alliance partners
More robustly defend license or tax transactions or litigation positions
Make better decisions regarding which R&D projects are likely to generate the best “bang for buck"
EverEdge Keystone™ Intangible Asset Business Valuations provide companies and investors with robust, defensible business valuations that articulate the true value of your company or critical intangible assets.
We help companies achieve higher valuations by ensuring that the true value of ALL their assets are captured within their business valuation. Dependent on our clients' needs, we can provide full business valuations or can value individual intangible assets.
We have extensive experience in valuing the following kinds of intangible assets:
This is more than theory. EverEdge’s Keystone™ Business Valuations have been instrumental in assisting our clients to raise more than a billion dollars in capital.
We have helped to generate the following outcomes for our clients:
Provided the business valuation that supported the largest capital raise ever in Asia for a pre-revenue company: $400M raised at a $200M pre-money valuation [Singapore]
Oversaw the sale of a SAAS company at a 67X multiple [Australia]
Oversaw the sale of a financial services company at a 32X multiple [United Kingdom]
Sold the intangible assets of a failed company on behalf of its investors, generating a 45X return [United States]
Valued the intangible assets of a publicly-traded company entering a JV saving them US$22M in cash [New Zealand]
These results mean our Return on Fees tend to be very strong - typically more than 10X - as even a small upward movement in pre-money valuation vastly offsets our fees. For example, consider a small equity raise: if a traditional valuation suggests a pre-money value of $10M and EverEdge’s Keystone™ business valuation supports even a small (20%) value lift, this generates an additional $2M in increased value. Even if we assume valuation fees of $100K this is a 20 to 1 return on fees. Many business valuations will cost considerably less than this.
Robust, accurate, business valuations
A broad range of factors are typically reviewed in an intangible asset valuation, which means the resulting report tends to be more expansive, with a greater emphasis on prose, explanation, and evidence than endless (easily manipulated) spreadsheets.
An EverEdge Keystone™ Intangible Asset Business Valuation will read as a robust, defensible, business-focused report that articulates and contextualizes the value of the most valuable and important assets the company owns today - your intangible assets.
The valuation will be built on a solid interlocking framework of multiple, well-researched factors that together support a value that can be relied on. This enables companies to seek – and secure – better outcomes during transactions and to better understand day-to-day how their intangible assets can be managed to drive additional growth and profitability.
EverEdge's Singapore-based team is also available to meet with investors, counter-parties to M&A or JVs, regulators or tax authorities or appear as expert witnesses to defend their valuations.