From very preliminary through post-merger stages, valuation plays an important role to support the management decisions and communication among the buyer, the seller, and other stakeholders of M&A. While the shareholder activism has been strengthening its power, how to ensure the fairness of transaction price has become one of important governance issues in Japan, where the management is required to have adequate understanding on key issues of valuation and to make reasonable judgment during the price setting and negotiation process. Our experts are providing following advisory services from truly independent perspectives.
- Review of valuation by the third-party valuation firm – checking reasonableness of procedures, methodology, and inputs, analysis of major issues on valuation and related risks
- Review of business plan to be used by the valuation firm in M&A or reorganization on points including feasibility, reasonableness of assumptions and data to be used, consistency with accounting standard and economic theories, and related advisory for improvement
- Expert advisory to the management or special committee on valuation issues in cases where strict fairness is required such as going private deals
- Expert advisory on procedures of valuation of stock to be transferred under the joint-venture contract, including advisory on selection of independent arbitrator or valuation firm, designing procedures and protocols, and negotiation with the JV partners
The shareholding structure of Japanese firms have been gradually changing due to an increase in non-Japanese shareholders and decay of mutual ownership representing Keiretsu. On the other hand, certain tension has been imposed between shareholders and management after the implementation of corporate governance code and stewardship code for institutional investors. Objective evidence and logical framework are respected during discussion on major investments, trade, capital policy, or enterprise value, etc. among stakeholders including shareholders, management, financial institutions, and business partners. Our experts are assisting constructive communication among stakeholders in situations as follows:
- Assist communication between companies and investors – through business and financial SWOT analysis, bench marking analysis, construction of equity stories, etc.
- Assist building a business plan through modeling, review of business assumptions and forecasting, etc.
- Analysis of cost of capital and the related capital policy advisory
- Financial modeling or model review for M&A and investments and related advisory
- Assist making a business plan through modeling, review of business assumptions and forecasting, etc.
- Data analysis based on financial/management/market data and related advisory