Case Study #14 – Reviewing the Reasonableness of a Buy Offer – Potential Sale

Company X (company details removed for privacy purposes)

Engagement & Subject Company:

  • Company X was offered $250,000 for a 100.0% equity value and contracted InteleK’s services to find an indicated range of the fair market value for the Company to ensure proper price negotiations.
  • Company X is a dental laboratory that manufactures dental products customized for individual application as prescribed by licensed dentists.

Case Facts & Analysis:

  • A Key elements of negotiation, the company’s performance, and industry and economic environment were:

Valuation & Analysis:

  • In order to address the key case facts in this valuation InteleK followed the below process:

Valuation Results:

  • As a result, the Company’s indicated valuation ranged between 1.90x to 3.0x higher than the $250,000 offer. The buyer’s offer indicated an overweight of current challenging business and financial conditions while the seller’s expectations of value underweighted current conditions. Conversely, InteleK’s value conclusion considered current and future sustainable performance under normal market conditions to determine an educated and unbiased valuation.
  • As part of InteleK’s indicated value, we provided a detailed explanation of key case facts affecting the Company’s valuation, ensured an unbiased and defensible range of values, and key information on how the value of the Company could improve.