Advice you can count on for
business sellers and acquirers

Frequently Asked Questions

We have tried to pre-empt questions that visitors to our website may have based on the questions we have been asked, most frequently, over the years.  However, if we have not featured the question that you have in mind, please Contact Us or call us on 02476 100476.

Why are private companies valued on a lower multiple of profit than publicly quoted (stock exchange) companies?

These days, there is a very significant size difference between quoted companies and all but a handful of private companies and, in reality, there is little similarity between the 2 types of enterprise. The key reason why the relative value of quoted companies is so much higher is because there is a ready market for the shares and it is a market dominated by large institutional investors chasing returns. In contrast to this, there is a very limited market for private company shares and almost no market for anything other than a controlling interest in private company shares. 

How does Anderson Shaw value a minority as compared with a majority private company shareholding?

In short, we do not. We only ever value 100% of a business. In most cases, shareholders will assume, or a Shareholder Agreement will state, that shareholdings are valued on a pro-rata basis. If this is not the case, it becomes extremely difficult to value a minority stake because, unless there are blocking rights (normally requiring 25%+) or a right to and track record of dividends, a minority shareholding in a private company is technically worthless.

I am/my client is involved in litigation and the Court has asked for a valuation of my/my client’s business. Can you help?

No, unfortunately we are unable to assist in preparing valuations for the Court. This is because the Courts require valuations to be prepared in a format and following guidelines which we do not wish to adopt. Also, we are unable to act as an Expert Witness which is often a requirement of the Court process.

How does Anderson Shaw Charge for Business Valuations?

We are always happy to provide business sellers with a preliminary, verbal valuation for no charge.
If a formal business valuation is required we charge on a day-rate basis and at present this is £750 + VAT.

For small uncomplicated businesses, we allow about 1.5 days for a desktop valuation. For larger more complicated businesses we will do our best to provide an estimate of the time required to carry out the work. Where the valuation is being carried out to resolve a dispute which is not going to litigation, we are happy to try to work with both sides to ensure they have appropriate input to the process and to explain the thinking behind the valuation we produce.

 We are always amenable to discussing alternative fee structures.

Anderson Shaw has offices on the outskirts of Stratford-Upon-Avon and provides business broker and corporate finance services for clients throughout the Midlands and the UK.

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