Business ValueXpress

A Business Valuation and Deal Structure Software

Business ValueXpress (BVX) is one-of-a-kind business valuation software that simplifies business valuation and provides objective valuations that equal real-life actual transaction. BVX integrates Price, Terms and Deal Structure, and uses optimization techniques to satisfy the needs of all parties to an M&A transaction. Some of its unique features are, cash vs. financed valuation, stock vs. asset purchase valuation, mezzanine equity determination, and goodwill calculation. With BVX one can perform live interactive valuations. BVX does not use any formulas, nor does it use any market data. 

BVX is a new dimension in valuation accuracy and simplicity. 

High Accuracy: Business ValueXpress (BVX) provides highly accurate valuations that mirror actual buy/sell transactions in real-life. This accuracy is a direct result of BVX’s approach of determining business value that satisfies the needs of all parties involved in buying and selling of a business.  As an example, BVX satisfies seller’s need for maximum price, and buyer’s need for return on investment (ROI) and minimum cash equity. Users have been surprised at the accuracy of BVX valuation by testing it on completed transactions.
BVX valuations include not only a numerical value for the business but also the associated terms, the deal structure, and the operating assumptions. Therefore, BVX valuation will be different for an “all cash” transaction vs. a gap-financed transaction (gap financing 

A powerful Business Valuation Software

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High Accuracy Valuation in seconds   Unmatched features New valuation theory  A management tool for "What if" analysis   Interactive valuations   2 seamless tools; Valuation and Deal Structure   For Small businesses to large businesses, any type   For M&A Advisors, Business Brokers, CPA’s…   No Formulas, 500,000+ calculations per valuation

is usually provided by either the seller, or a cash flow lender, or a mezzanine lender, or a combination of these parties). Similarly, BVX valuation will be different if the transaction is an asset purchase or a stock purchase. Similarly, BVX valuation will be different depending on operating parameters, financing, and future performance. 

BVX results are more believable, because they are based on objective inputs. BVX does not use any formulas, nor does it use any market data. Subjective inputs like weighting factors, cost of capital, selection of valuation method, selection of basis for earnings etc., are all eliminated in the Equilibrium method used by BVX. 

Valuation In Seconds, easy-to-use and easy-to-learn: The power of Business ValueXpress (BVX) is easily deployable with extreme ease. One user said,  

“BVX is a shoulder fired, thermonuclear deal weapon.” G.R., New Jersey 

Due to one-screen operation and user-friendly intuitive interface, a person with financial background can complete a business valuation in a breeze. The “new valuation” template, that opens every time one starts BVX, requires only nine input parameters to complete a first-cut valuation for a new business. BVX eliminates subjective inputs, and limits inputs to those which are most critical, are operations driven, and are easily available. This makes it one of the easiest, but most powerful business valuation software. 

BVX has many features that are not available elsewhere. 

Unique Features:  

Business ValueXpress (BVX) provides many features that are not available anywhere else. Some of these unique features are,

1. Simultaneous determination of, 1) selling price, 2) buyer equity, 3) gap financing (often-called seller financing), 4) goodwill, 5) cash down payment to seller, and 6) Mezzanine equity.
2. Stock vs. Asset Valuation,
3. Cash Value vs. Financed Valuation,
4. Impact of tax-driven purchase price allocation,
5. Strategic Buyer impact,
6. Exit Strategy impact,
7. Seamless transition between valuation and deal structuring,
8. Instantaneous “What if” analysis, etc.

Other Features: 

1. 5 year inputs
2. Financing Inputs: Revolver, Term Loan, Over Advance Loan, Loan with Deferred Principal, Balloon Loan, and Mezzanine financing with principal amortization and deferred principal payments.
3. Non-compete and Consulting payments.
4. Independent Real Estate financials and ROI analysis. (Note: BVX does not value real estate, but does analyze its financials.).
5. Reports can be printed or exported to Excel. The reports consist of: 1) a two page Summary report of valuation results and all inputs, and 2) detail back-up reports of income statement, balance sheet, cash flow, ROI, sources/uses of funds, purchase price allocation, bank loan details, depreciation schedules, etc.

Commonly known finance theory states, “… the value of the firm is independent of financing…” Such theory and its advancements have been the foundation for corporate valuations. However, the real world has significant deviations from the simplified assumptions used in such theories. In real world, value of a firm depends on available financing, terms of the deal, the structure of the deal, and operating parameters.  

Business ValueXpress (BVX) defines Value of a Firm as,  

“Value of a Firm is the Equilibrium of Price, Terms, and Deal Structure that satisfies the needs of all parties to an M&A transaction.” 

BVX calls this approach to valuation as the Equilibrium method of valuation.  

The Equilibrium approach satisfies the needs of all parties to the transaction; specifically, the needs of the seller, the buyer, the lender, the tax authorities, and the business itself. Some of the needs that BVX satisfies are maximize selling price, minimize buyer equity, achieve buyer’s ROI target, meet lender obligations, pay all taxes, fund working capital etc. For more discussion see BVXMethodology.

Owners are always interested in increasing shareholder value. To this end, sales and profit improvement get the most attention. However, there are other value-drivers that can improve shareholder value. The interactive capability of Business ValueXpress (BVX) is designed to help quickly identify and quantify the impact of other value-drivers. For example,  

What is the impact on business value of improving inventory turns?  

What is the impact on business value of quality financials, or good inventory counting?  

Does growth always mean more value?  

Does higher profit margin mean higher price multiple, or higher value, or both? 

Why do process industry valuations differ from traditional manufacturing? 

What if the sales growth comes from slow-paying customers? 

… and more. 

BVX is a powerful tool for instantaneous “What if” analysis. Many of its answers are counter-intuitive, and often, unexpected. 

BVX moves valuations from the back-office to live & interactive valuations on the laptop. 

Why are business valuations done in the back-office? 

Why is business valuation a big “Project”? 

The objective inputs, and the resulting objective valuation of Business ValueXpress (BVX), empower the user with the confidence of doing live, frequent, and interactive valuations in front of the clients. No longer business valuation has to be limited to the back-office; it can be done on the laptops with the clients. BVX is being used on a negotiating table to help bridge differences of various parties. BVX eliminates the defensive posture that one needs to take to avoid explaining subjective assumptions of traditional valuation approaches. With BVX, there are no inputs for choosing valuation methods, weighting factors, selecting earning basis, cost of capital etc.

A seamless valuation tool and a deal structure tool in one product. 

Business ValueXpress (BVX) provides two powerful business valuation tools in one software product; a Valuation tool and a Deal Structure tool. A single common screen is used for doing valuations, and for analyzing deal structures and “What if” scenarios. 

As a valuation tool, BVX determines the “Best Value” that satisfies the needs of all parties to a transaction. The “Best Value” is where most transactions occur, because it is not only the highest value for the seller, but it meets the expectations of all other parties to the transaction.  

The Deal Structure capability of BVX is unmatched in its flexibility, ease-of-use, instantaneous results, and guided feedback. Its use is limited by ones imagination and understanding of financials

What would happen to cash flow and ROI, if the offer were increased? 

What should be the price decrease if the financial markets tighten-up? 

What are the economic implications of changing an Asset offer to a Stock offer? 

What happens if growth projections do not come true? 

What happens if the profit is less than expected? 

If any input is changed, after determining the “Best Value”, BVX automatically changes into an “interactive” mode. All outputs are instantaneously changed, as inputs are changed. For example, if the deal structure is changed from an Asset Purchase to a Stock Purchase all outputs (including Buyer ROI, income statement, balance sheet, cash flow, etc.) are changed automatically. Similarly, if the deal is modified for price, or equity, or growth assumption, or lender financing terms, all results are changed automatically. BVX uses intelligent color-coding to flag areas where the needs of the parties are not satisfied.

BVX can be used for small or large business, any type. 

Business ValueXpress (BVX) has been used in many different industries for valuation of small mom-and-pop businesses requiring no bank financing to large privately held business requiring multiple layers of financing. Even though BVX inputs are independent of the size and the type of the business, its valuations equal actual market transactions. Why are BVX valuation results so accurate? This is due to the fact that BVX relies heavily on the operating characteristics of the business, and the ability to get financed; these factors presumably reflect its size, industry, and overall health of the economy. The fundamental premise of BVX is that the valuation of a company is company-specific, not just industry-specific.  

For example, lets us say there are 3 companies manufacturing Grabule, a health care product. Assume that each one of them makes the same profit, has the same growth opportunity, and can get the same financing terms. One company sells to the drug stores, the second to the hospitals, and the third to the retail customers with credit cards by phone. BVX will come with a different valuation for each of the three companies; conventional methods will not.  

For Mergers & Acquisition Advisors, Business Brokers, CPA’s, Lenders, Financial Advisors, Sellers, Buyers, and Attorneys. 

The convenience and the accuracy of Business ValueXpress (BVX) opens new markets for decentralized business valuation in the hands of many users. Following observations are based on user feedback. 

1. BVX helps M&A advisors and business brokers to improve deal screening prior to engagements, to manage buyer/seller expectations, to reduce deal collapse, and to recover from cratered deals.
2. CPA’s and Accountants can now do in-house business valuation, and immediately provide detail financial statements that can be taken to the bank. They can stand behind their work without having to rationalize subjective assumptions of conventional methods. They can now offer an annual check-up of business valuation to their clients.

Many CPA’s are able to use this fact for cost justification for improving client’s financial reports. Higher quality financial statements improve financing terms form the lender which in turn increases the value of the business

3. Financial advisors, whose clients are business owners, find that their selling cycle has dramatically reduced. They no longer have to wait months for the business owner to get an outside business valuation.
4. Sellers, who have some financial familiarity, can perform their own valuations. BVX helps management understand shareholder value impact resulting from decisions that involve working capital and capital expenditures; because working capital and capital expenditures are an integral part of BVX business valuation.
5. BVX helps buyers make an defensible offer based on their projections, ROI expectations and ability to get it financed. BVX also helps the buyer develop creative deal structures to satisfy the lender and the seller.
6. Lenders and attorneys can use BVX for a quick in-house assessment of the transaction.

Business ValueXpress (BVX) does not use any formulas, nor does it use any market data, nor does it use any known valuation methods. How does then BVX determine the valuation of a business? 

BVX uses random numbers generators to start with a set of numbers for the selling price, the buyer equity etc. It then calculates a complete set of financial statements for these assumed set of numbers. Then it tests to see if the financial statements satisfy the needs of all parties to the M&A transaction. If all needs are not satisfied, BVX changes the starting set of numbers and tries again. It goes through this iterative process until all requirements are satisfied and the selling price is the maximum. The number of calculations can vary depending upon the random starting position of the key variables, and depending upon the complexity of the valuation. Typically, BVX would perform 500,000 to 10+ million calculations per valuation. For more discussion see BVX methodology.