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£224,000
Central value of the whole company
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Divorce valuation: why three earlier figures were too high
Details have been anonymised and some figures rounded to protect client confidentiality.
- Sector
- Specialist recycling services
- Purpose
- Divorce and financial mediation
- Size
- Owner-managed limited company
- Region
- UK
£148,000
Central value of the whole company
2.3x
Central multiple of maintainable EBITDA
Pro rata
Each spouse's holding, discount scenarios shown separately
3
Earlier valuations reconciled line by line
The situation
A couple going through financial mediation both held shares in a small specialist recycling company run by one of them alongside a co-director. One spouse held voting shares and worked in the business. The other held non-voting shares and had no role. Before instructing us, three figures had already been obtained, two from valuation firms and one from an online calculator.
The difficulty
All three earlier figures were higher than the business could support. The mediation needed a number both sides could test, not a fourth opinion to argue over.
What we did
We valued the whole company on maintainable earnings, building the multiple down step by step from current UK small company deal data. We added genuinely surplus cash and a separate investment held by the company. Then we reconciled our figure to each of the three earlier indications. The largest single reason for every gap was the same. Each had added the full net asset value on top of an earnings value, so the assets that generate the profit were counted twice.
The outcome
Whole company value of £136,000 to £160,000, central £148,000. Both holdings were valued pro rata, with discount scenarios shown but not recommended, leaving that question to the parties and their advisers. The report was written for one spouse and could be shared with the other and their advisers.
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