On Tuesday November 27th, Conference entitled: “How much is my company worth? The question every family business must ask itself, when it does not need to know the answer yet”, was organized by the Family Business’ Chair of the University of Valencia (CEF-UV)
During the event, which took place in the BANKIA Auditorium, experts Carlos Ochoa (Broseta's Partner at commercial law area) and Nasir Alam (M&A Director of Bankia) shown many of the situations that can arise throughout the life of a family business. Carlos Ochoa presented at least six situations that in practice oblige the family business to be valued, the most common cases being sales and capital increases, as well as others more difficult to resolve such as separation and exclusion of partners. In his own words: “these situations imply many uncertainties and potential future conflicts. Therefore, planning and negotiating valuation criteria becomes so important when conflicts of interest have not yet occurred, and it is very useful to include them in shareholder agreements or family protocols.”
For his part, Nasir Alam referred to situations related to inter-organizational and corporate operations, such as corporate sales, mergers, acquisitions or sales. Nasir stressed that "the current market moment is especially good in terms of the volume of corporate operations in the mid-market segment." Likewise, he insisted that "planning any corporate operation is essential to maximize the value obtained from it", and explained that "anticipation in carrying out an assessment is a first element of analysis to determine the areas that can serve to manage a potential transaction" Subsequently, he made a brief tour of the different valuation methods to illustrate their implications and suitability for different contexts.
Next, entrepreneurs Manuel García-Portillo (Tecnidex President) and Lidón Avinent (Syntech Research Spain CEO) delivered a practical vision, talking about their own experiences in the valuation of their companies, and offering practical recommendations on the right moment to deal with this process. García-Portillo stressed that the assessment depends on the relationship with the partners, employees, suppliers, etc., and that when making a decision about buying or selling companies, it is important to ensure it is good for the project, good for people, and good for the businessman and his family. He also recommended establishing red lines and promoting oxygenation in companies to renew and improve their operation. For her part, Lidón Avinent pointed out the importance of anticipating possible problems through shareholder agreements, and highlighted the positive aspects of her valuation experience, insofar as “it allows you to know the evolution and situation of the company, discover some of its deficiencies or weaknesses, and quantify the value of many things that you generally do not consider. "
The conferences were presented by Alejandro Ríos (Partner and Director of Broseta) and Carlos Aguilera (Regional Corporate Director of Bankia Corporate Bank), and the debate was hosted by Alejandro Escribá, CEF-UV Director. Carlos Aguilera stressed that "within the specialized advice for the companies that we provide at Bankia, key services include the set of technical and professional arguments that allow determining value range of your business’ plan”. Aguilera showed that "this set of parameters is a valuable tool for managers and owners of a company, whether in a corporate operation that involves an exchange, entry or exit of capital of the same, as if not”. "Every manager has to know what are the aspects and processes that optimize the company’s value, taking into account the risks that are assumed so that, they can be considered in their long-term strategic planning," he added.
The closing of the event was held by Alejandro Escribá-Esteve, who presented the main conclusions of the day, highlighting above all the importance of establishing evaluation criteria, to anticipate and minimize the possible conflicts that may arise from these processes when conflicting interests make it more difficult to reach satisfactory agreements for all parties.
In conclusion and quoting the Chair director: "Regularly reflecting on how much the company is worth helps to minimize potential conflicts between partners and increase value in transactions"
You can watch the conference here:
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