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Valuations & Modelling

Unique businesses require unique insights

Value creation is key to business and transaction success. At Deloitte, our Valuations & Modelling services help businesses make decisions confidently, enhancing their results, and helping them get ahead of key issues.

Deloitte brings deep experience in valuing, financial modelling and analysing business interests and their underlying assets, in the context of M&A, strategy, restructurings, financial reporting and compliance.

Valuations

A proven Methodology

 

Several valuation methods are used to determine the value of a company. Deloitte employs a combination of methods to develop mutually supporting evidence towards the valuation conclusion.

 

Key Service Offerings:

 
Indicative and independent valuations

We perform valuations of business enterprises and equity instruments for, inter alia, transactions, disputes and to assist management in making decisions.

Fair and reasonable opinions

We specialise in providing independent opinions, which are required in terms of South African legislation.

SARB letters

We provide limited assurance valuation reporting for South African Reserve Bank purposes where transactions involve non-residents.

Purchase price allocation valuations and intangible asset valuations

We value intangible assets for financial reporting purposes relating to an acquisition. We also perform independent reviews of purchase price allocation valuations.

Going concern reviews

We review cash flow forecasts in order to test the going concern assumption for financial reporting purposes.

Impairment testing

We perform and review valuations for the purposes of determining the recoverable amount of assets for impairment testing in terms of IAS 36.

Fund valuation

We provide funds with recurring portfolio valuations for various purposes.

 

Business Modelling

Enhancing Value with Investment Decisions

A dynamic Model, with the ability to produce a range of relevant outcomes, should be at the centre of all investment decisions. We have experience with both early-stage and mature businesses and have assisted clients across all industries with their investment decisions. Our aim is therefore to be involved in the entire investment life cycle of our clients.

Key Service Offerings:

Capital allocation decisions include:

  • Debt payment / drawdown
  • Share issues / buybacks
  • Dividend declaration
  • Capex
  • Investment / Divestitures

Our capital allocation models dynamically measure the financial impact of each decision on ROA, ROE and ROI criteria, carefully considering financial, economic, tax and accounting impacts. Environmental, Social & Corporate Governance (ESG) metrics are an integral component of our models, and therefore support strategic capital allocation.

To create value, M&A transactions require a thorough understanding of the target, including the impact of financial, economic, operational, funding and tax drivers. Our investment case models combine these various drivers within a single tool, with valuation and price negotiation discussions facilitated through dynamic scenario analysis. The post-acquisition impact on cash flows and earnings may also be assessed.

We also provide Monte Carlo simulations to support sophisticated sensitivity analysis and valuation decisions.

Our financial statement models generate integrated IFRS income statements, balance sheets and cash flow statements as well as bespoke covenants and ratios. Our forecast models assist with liquidity and solvency assessments, cost management, and dividend policy and thereby facilitate effective capital allocation decisions.

We also assist public interest companies with their JSE and investor relations requirements to report forecast earnings (HEPS).

We conduct bankable feasibility studies and provide input into project information memorandums to assist with the viability of (typically) infrastructural projects. To further assist with (debt) funding and tariff pricing decisions, we develop project finance models. We also conduct technical model reviews on behalf of project sponsors and lenders to help provide comfort over the logical integrity and arithmetic accuracy of the model; as well as determining whether model inputs are consistent with source documentation.

Recommendations

Value Creation - Transformation

Unleashing existing businesses by framing performance using value creation methodologies and mindsets, leading to a step change in profitability
Services

Competition, litigation, markets and regulation

Using economic analysis for litigation and regulatory matters involving proposed mergers, allegations of anticompetitive horizontal conduct or monopolisation including antitrust advice, market analysis, and damages estimation.
Services

M&A Corporate Finance Advisory Global Deals Experience | Deloitte

Providing independent financial, M&A and debt / equity advice – whether you are seeking to expand organically or via a strategic acquisition, realize value through the sale of a business, a subsidiary or a shareholding, raise new finance, review debt facilities or improve balance sheet funding efficiencies.
Services

Economic Modelling and Forecasting

Using economic modelling to guide decision making and analyse the impact on the economy including economic contribution studies, macroeconomics and outcomes and impact measurement.
Services

Key contacts

Mohsin Khan

Partner - Financial Advisory
+27 11 304 5314

Graham McLeish

Valuations & Modelling, Financial Advisory
+27 11 209 8609