A listed company with a strong M&A team realised that its standard due diligence procedures could not get to grips with the value and risk profile of an early-stage tech company. They commissioned our specialist valuer to conduct intangible value mapping; to assess the quality of the target’s technology, and to provide an opinion on the value of the target’s equity. The value mapping confirmed that the technology was the cornerstone asset of the business. Additionally, in order to achieve  projected revenue, the target would have to maintain competitive advantage by building its data asset and strengthening brand equity.

Due its pivotal role a full-scope evaluation of the tech platform was conducted, including:

• patent attorney review of barriers to copycat technology

• review of evidence of the functional performance of the asset relative to alternatives

• quantification of the financial performance of the technology

• risk assessment

Insights from this analysis were incorporated into a discounted model and to benchmark earnings multiples of comparable companies. Although the valuation supported the asking price, the board was particularly interested in our depiction of the target’s risk profile and decided to allocate the funds to an opportunity with a better strategic fit.