Business Valuation: Crucial for Mergers and Acquisitions

Posted by All Around Moving on March 24th, 2017

For any company acquiring a business or moving ahead into a merger, business valuation is the first and most crucial step. M&A deals can be worth millions or billions and ensuring the money is being secured at the right place is of utmost importance. M&A transactions bring about a lot of changes in the business ecosystems, such as, future of the company, the career of employees and top management, the value of shares and so on. It is very important to ensure that all of it is changing for good. All this can be taken care of well if the business to be acquired is critically evaluated.

Simply put, valuation is a method of estimating the relevant and fair value of a business in the market. Business valuation might include factors such as economic conditions, financial analysis of the company/ business, share and shareholders’ value etc. to come to a justifiable number. A third party business valuation lends credence to the asking price of seller and what a buyer is willing to pay. It also lays a base for negotiation between the two parties.

Talking about a specific region, i.e., UAE, the ever growing and diverse economy has given way to increase in number of businesses in the country. A lot of factors, such as, a lenient legal framework, good physical infrastructure, impeccable payroll services in UAE resulting in availability of quality manpower, and investment support by the government etc., are responsible for new businesses popping up in UAE markets. The Emirates Chartered Accountants group has curated a separate business valuation division for Business valuations in UAE.

And, one of the most desired places in UAE to start a business is undoubtedly, Dubai, the reason being its modern and efficient logistics infrastructure and connectivity. Dubai is the third largest export hub connecting businesses to key international markets. Also, the payroll services in Dubai help retain and provide world-class manpower services for all kind of businesses. The cut throat competition in the market calls for Business valuations in Dubai to help the companies make wise, profitable and sustainable decisions.

With the increase in the number of businesses budding in Dubai and UAE as a whole, there has been an increasing demand for business valuation agencies. It is advised that all the businesses should undergo valuation time to time with changing economic and financial conditions and before making any big decisions regarding their business!