Company valuation and purchase price allocation
- Valuation and financial expertise
For a SAAS software publisher
Context and progress of the mission
In the context of the preparation of a1st set of consolidated financial statements as of December 31, 2019, following the creation of a holding company that acquired an operating entity in December 2019, the work of allocating the acquisition price had not yet been carried out. The entire goodwill between the acquisition price of the shares and their book value was recorded as goodwill.
Our mission focused on the valuation and documentation of this goodwill in order to allocate the goodwill in the accounts to identified intangible assets such as the brand and the customer portfolio. This breakdown is structuring because some intangible assets are amortizable and others are not.
In addition, the assignment also involved the construction of an impairment test to calculate the company’s value in use. We have documented the choice of indicators used for this test (CMPM, SI rate, growth rate to infinity, etc.).
Sources used for the analysis
- S&P Capital IQ as a financial database
- Markables, historical goodwill allocation on similar transactions in recent years
- Publicly available information on the software publishing sector and comparable companies
- Customer financial information
- Auditor’s report
- Contractual documentation
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