PwC Gibraltar: Valuations and Strategy

Succession planning and/or investing in a new business within a familiar or an unfamiliar industry are common strategy opportunities available to businesses.

A price in which a business could be bought or sold is dependent on its valuation and what a third party is willing to pay given the circumstances. Determining the valuation of a privately owned business can be difficult. PwC can use valuation experts to calculate a specific value which is tailored to a business and the industry in which it operates. Alternatively, we can use key financial data from listed entities in similar industries together with ratio and discounted techniques to provide a potential value of a business.

The acquisition or disposal of a business in itself can often form part of a much larger restructuring exercise. The impact of each factor in the restructuring process needs to be considered carefully, especially if the business has different operating segments trading in different jurisdictions.

PwC will bring an independent perspective giving you a more insightful understanding of the impact of different financial, operational and commercial assumptions on your profit, tax or financing position. Our model review help our clients make their investment decision with confidence.

As part of the restructuring process PwC can devise a cost reduction strategy to identify synergies and improve both business efficiencies and performance focusing on short to long term objectives. This includes:

  1. Analyse all strategic investments and joint ventures: Make a decision about the inherent value they generate versus the costs of managing.
  2. Identify unprofitable or marginally profitable products in a portfolio: Make a decision about divesting or accelerating profitable growth through acquisition.
  3. Review your management structures and client coverage models with a view to reducing duplication.
  4. Analyse the most profitable customers in each portfolio: Make a decision about the cost of focusing your marketing spend on directly targeting them.
  5.  Overhaul incentive compensation structures to better link pay with business performance.
  6. Conduct a strategic review of all suppliers. Opportunities for contract renegotiations and appropriate use of substitutes will be possible.
  7.  Analyse the supply chain. Focus on optimising spends on both inbound and outbound.
  8.  Review the appropriateness and effectiveness of the administrative, operations and technology functions.
  9. Review the merits of insourcing versus outsourcing
  10. Significant opportunities for cost cutting will probably lie in areas including legal, tax structuring, corporate real estate, travel and entertainment.

Contact us

Edgar C Lavarello

Partner, PwC Gibraltar

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