is a Corporate Finance tool that provides objective valuation and deal structure
analysis in buying and selling of businesses. BVX®
is an interactive, intuitive, and easy-to learn program that performs valuations
is designed to help Buyers of businesses, Sellers of businesses, Accountants,
Attorneys, Bankers, Business Brokers, Mergers &Acquisition (M&A)
Advisors, Financial Advisors, and Business Consultants. BVX®
adds objectivity to business valuation, deal structuring and the M&A
BVX® determines the maximum business
value for the Seller while minimizing the Buyer’s equity. Its proprietary valuation
approach is based on the following BVX®
definition for the value of a firm.
“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.”
The above approach, called the
Equilibrium method of valuation, is a departure from the conventional valuation
methods that are generally silent or lack clarity on the terms and deal
structure associated with business value. In BVX®,
Price, Terms and Deal Structure are interdependent. BVX® determines the
optimal business value by satisfying the requirements of the five claim holders
to the business cash flow. These claim holders are: a) the Seller, b) the Buyer,
c) the Business, d) the Lenders, and e) the Tax Authority.
uses proprietary methodology that involves
decision-making algorithms and use of optimization techniques to satisfy the
needs of all parties to an M&A transaction. BVX® does not use any market
data, nor does it use any known valuation formulas, or methods.
has many unique features and capabilities
that are not available elsewhere. For example, BVX® provides a simultaneous
determination of Best Business Value, Required Buyer Equity, Required Gap
Funding (often financed by the Seller), and Mezzanine Equity.
provides two tools in one program. As a valuation tool it provides BVX®
Best Value. As a deal structure tool it interactively provides financial
performance of the business and Buyer’s ROI (Return On Investment). BVX®
is useful for simple transactions with no bank debt to complex deals involving
mezzanine financing, balloon note, deferred payments, and over advance loans.
BVX® makes business valuation more
objective, precise, and simple. It operates from one screen in an interactive
manner. Its quickness can become an addiction to test various scenarios and
develop insight into improving shareholder value. BVX® inputs are easily
available and require no (or limited) guesswork. These inputs, which are limited
to the ones that are most critical to the value of a typical business, have been
chosen based on years of extensive analysis and market research. BVX® requires
selected inputs from the following categories: a) Income Statement, b) Balance
Sheet, c) Growth Assumptions, d) Financing, e) Deal Structure, f) Taxation, and
g) Exit Strategy, and a few others.
Financing of the transaction and
creative deal structures play a critical role in BVX® valuations. BVX®
differentiates business value depending upon purchase price allocation, buyer
synergy, and the acquisition method (specifically between the “Assets
Purchase” and the “Stock Purchase” acquisition method).
BVX is designed for small and medium
size privately held businesses; however, it can also be used for large
corporations and public corporations. BVX® determines the operating value of
the business, which is often called the “Enterprise” value. “Equity”
value of the business can be calculated by adjusting for the excluded
non-operating assets, the non-operating liabilities, and the debt obligations.
(See Price, Balance Sheet, & Profit).
is a Corporate Finance Tool rather than an accounting or legal tool. Its purpose
is not to provide litigation support or to comply with IRS requirements. BVX®
derives its usefulness and simplicity by focusing on the few key aspects of
buying and selling a business. BVX®
results should be carefully reviewed with accountants, attorneys, and other