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.
results are more believable, because they are based on objective
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.
Seconds, easy-to-use and
easy-to-learn: The power of
Business ValueXpress (BVX)
is easily deployable with extreme ease. One user said,
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.
has many features that are not available elsewhere.
Business ValueXpress (BVX)
provides many features that are not available anywhere else. Some of
these unique features are,
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.
Stock vs. Asset
Cash Value vs. Financed
Impact of tax-driven
purchase price allocation,
Strategic Buyer impact,
Exit Strategy impact,
between valuation and deal structuring,
if” analysis, etc.
5 year inputs
Revolver, Term Loan, Over Advance Loan, Loan with Deferred Principal,
Balloon Loan, and Mezzanine financing with principal amortization and
deferred principal payments.
Independent Real Estate
financials and ROI analysis. (Note: BVX
does not value real estate, but does analyze its financials.).
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
is a paradigm shift in the field of business valuation theory.
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.”
calls this approach to valuation as the Equilibrium method of
Equilibrium approach one values businesses based on Future Performance,
Financial Leverage, Financial Return Expectation, Cash Flow (Not
Profits), Deal Structure, Asset Type, and Exit Strategy. For more
discussion see Valuation Approach
of Business ValueXpress.
is a management tool to understand shareholder value-drivers.
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
is designed to help quickly identify and quantify the impact of other
value-drivers. For example,
What is the
impact on business value of quality financials, or good inventory
profit margin mean higher price multiple, or higher value, or both?
is a powerful tool for instantaneous “What if” analysis. Many of its
answers are counter-intuitive, and often, unexpected.
moves valuations from the back-office to live & interactive valuations
on the laptop.
are business valuations done in the back-office?
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
eliminates the defensive posture that one needs to take to avoid
explaining subjective assumptions of traditional valuation approaches.
there are no inputs for choosing valuation methods, weighting factors,
selecting earning basis, cost of capital etc.
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”
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
is unmatched in its flexibility, ease-of-use, instantaneous results, and
guided feedback. Its use is limited by ones imagination and understanding
would happen to cash flow and ROI, if the offer were increased?
should be the price decrease if the financial markets tighten-up?
are the economic implications of changing an Asset offer to a Stock offer?
happens if growth projections do not come true?
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.
can be used for small or large business, any type.
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
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
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.
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.
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
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.
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
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.
Lenders and attorneys
can use BVX
for a quick in-house assessment of the transaction.
performs 500,000 to 10+ million calculations per business valuation.
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?
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