Numeriasm provides the clearest view of a firm’s
value through a private stock exchange-like process.
Numeria uses multiple experts who independently analyze the
firm and then submit their valuation opinions, which together form a rich data
set that reveals the fair market value of the business. They include investment
bankers, financial advisors, corporate development officers and appraisers,
whose expertise is delivered without bias.
Before a firm is valued, key company information is compiled
and distributed to the participating analysts, who then conduct their own
research and pose questions to management in scheduled pre-pricing conference
calls. The analysts then independently prepare and submit written valuation
opinions, which are posted in the market before pricing begins.
These initial valuations can range widely, showing clearly that
a group of independent experts starting with the same information can reach
very different conclusions. We call this
Wild Card Risksm and it reveals the risk of relying on just
one valuation analysis.
Once the initial opinions are posted in the virtual
marketplace, all of the analysts convene with a Numeria market maker to
thoroughly vet each others’ valuations in a transparent, unscripted and
colorful debate about the true fair market value of the company. As the
analysts learn more about the others’ work and points-of-view, they change
their valuation opinions by submitting new prices to the market. This allows
all relevant information about the company to be reflected in the valuation.
The market action is seen in full-view by the client company’s
executives, and often provides unexpected insights about the firm.
How Numeria is Different
Appreciating Numeria fully requires knowing the alternative.
A traditional valuation relies on the opinion of one analyst
deriving one value (or, for wiggle room, a range of values may be offered).
This may be done by an investment banker, business broker or appraiser, or as a
Do-It-Yourself by the CFO, the corporate development team, or someone else in
the company. This traditional approach has major drawbacks, particularly when a
lot is at stake.
In contrast, Numeria analysts are independent experts who risk
their earnings and reputations on their valuation opinions. Like members of a
stock exchange, Numeria analysts – who include investment bankers, appraisers,
corporate development officers and financial advisors – deliver the best
expertise to each company being valued.