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Divorce valuation: why three earlier figures were too high
£148,000
Central value of the whole company
Read the case study →EducationShareholder dispute
Shareholder dispute: closing a £166,000 gap between two valuers
Details have been anonymised and some figures rounded to protect client confidentiality.
- Sector
- Alternative education provider
- Purpose
- Shareholder exit after a dispute
- Size
- c.£830,000 turnover
- Region
- South East England
£224,000
Central value of the whole company
c.£390,000
Second valuer's figure
£56,000
Each 25% holding, pro rata
12 pages
Line-by-line reconciliation of the two reports
The situation
Four directors each owned 25% of a growing alternative education provider. After a breakdown in relationships, some wanted out. The company instructed us, and a second firm was also asked to value it.
The difficulty
The second valuer reached around £390,000. Our figure was £224,000. With no shareholders' agreement and no price mechanism in the articles, the shareholders needed to understand why two professionals were so far apart.
What we did
Our report charged all four working directors at their current salaries for a full year, because that is the cost a buyer inherits. We also held back working cash for the summer months, when no income comes in. We then produced a separate reconciliation note that walked from the other valuer's figure to ours, step by step. More than the whole of the difference came from one point. The other report treated the directors' pay as already at market rate, although the forecast it relied on carried the full wage bill.
The outcome
Whole company value of £202,000 to £246,000, central £224,000. Each 25% holding was £56,000 pro rata, with discount scenarios shown but not recommended. Where the other valuer's approach was reasonable, the note said so.
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