Last Friday Valuecruncher was featured in the “Shoeshine” column of the New Zealand National Business Review (NBR). I would love to provide a link – but it requires a subscription (and I don’t do links to walled content). I will put a copy of the NBR article on the blog soon. This coverage in the NBR has resulted in a number of queries along the lines of “what is Valuecruncher?”. This post aims to provide an answer.
The very simple answer is we value companies. We use the same valuation methodologies as leading investment banks – discounted cash flow analysis, comparison company and acquisition analysis, and net tangible assets. Instead of having to go to expensive experts (investment bankers and maybe accountants) we use the same frameworks as these experts but simplify the process to provide a robust indication of value. Our valuations cost NZ$1,000 (plus GST) and are turned around in 24-48 hours – at least 10x cheaper than alternative options and 10x quicker.
Our clients provide the information in the form that we require and we do the corporate finance math. There is a one-page input sheet that provides the key information we require (and a guide to where the input sheet information comes from). If advisers (such as accountants) use our service we pay 15% to the adviser – the adviser completes the input sheet as they will have access to all the required information.
Valuecruncher uses the inputs and runs them through our models – and has one of the Valuecruncher team review the outputs. The outputs are reviewed by a valuation professional – a real person. We have not patented our processes as they are not radically new – they are what all of the leading investment banks use for valuing businesses. We have made the frameworks used by leading professionals available at a price most people can afford.
Why do people and companies require valuations? Investing in companies, selling stakes in companies, and fair value assessments in disputes are some of the reasons for valuations. We regularly see business owners that simply want to see an indication of what their business could be worth. At NZ$1,000 (plus GST) people can obtain a valuation at a cost-effective price.
We have two parts to our business:
1. Private valuations for clients – which are never in the public domain.
2. We operate a blog (which you are reading) – where we use publicly available information to complete valuations of companies (and businesses) that are topical.
We are aiming to provide a service where small business owners can get access to the same valuation techniques that leading investment banks use – at a reasonable price.
We are also aiming to improve the quality of valuation in the market generally. We are based in New Zealand and currently focus on that market. We don’t believe that the valuation work that comes into the public domain in New Zealand (or the wider world for that matter) is particularly good. There are very strong valuation professionals in New Zealand (and internationally) – but they primarily provide private advice to well-paying clients. The valuation expertise available to the media, smaller investors and the general “man in the street” is not strong. We are aiming to improve that.
The Valuecruncher blog provides some education on valuation (i.e. what is a share price?) and a database of valuations on major New Zealand companies (i.e. Trade Me), Australian companies (i.e. Qantas), international companies (i.e. Google) and topical transactions (i.e. the sale of Telecom New Zealand’s Yellow Pages Group).
We would like to see all NZX-listed, NZAX-listed and Unlisted-listed companies in New Zealand complete a Valuecruncher valuation on a six-monthly or yearly basis and make them available on their websites. Even doing it twice a year would only cost NZ$2,000 (plus GST) a year and provide all shareholders with a consistent valuation framework – additional transparency for all stakeholders. We can complete valuations for any stakeholders – give us the inputs and we can do the math. We list the assumptions that we have used – more transparency.
Our framework is what the professionals use. The Valuecruncher model is a simplified version of what leading investment banks use in major mergers and acquisitions and other corporate transactions. Valuecruncher provides an indicative valuation – but one using the same methods that the professionals use.
To obtain more information on Valuecruncher email your query to email@example.com or call Mark Clare on 0800-470227.