Wholesale importer and distributor of push bikes, pedal bikes, mountain bikes, ride bikes, BMX bikes and accessories i.e., helmets, shoes, clothes

Second generation business; business started in 1958 in Sydney and relocated to Queensland 2004.

Importing products from manufacturing companies mostly in China and Taiwan (12 factories), but also from Vietnam and Japan, France (3 factories), Israel (2 factories).

Distributing nationwide with national chain stores and big independent sports stores as one of their biggest customers and small stores with e-commerce or in-person shop.

Managing the logistics on their own.

Imports and distributes different brands of bikes including their own brand.

There was a merger offer on the table and the client needed to set a price thus requiring a valuation of the business to accurately determine what the value of their business is.

There was no one to take on the business; the son, who currently runs the business, was just about to become a father and it would take at least 20 years for someone to take over without a guarantee.

Getting enough information to evaluate and put out a valuation within a given time frame.

Valuation needs to be robust since it's specifically for a merger offer. Understanding the business is not always easy, as there is too much undocumented information that needs to be collected, arranged, and consolidated. .

One customer makes up a decent chunk of the revenue, but the cost of that cost was almost as much as the revenue, so the net performance of the business wouldn't be affected.

Before we can understand the business, the collection of information took five or six sessions and information collected were arranged and consolidated into a concise report, which then served as the foundation for the strategic planning sessions that followed.

Understanding the business. During valuation, the team looked at 4 main sections, (1) business specific background (operations) i.e., the people, the product, intellectual properties (IP), customers, suppliers, distribution networks (2) financial assessment i.e., revenue, earnings, assets, balance sheet (3) market value of what a business goes for in this industry of this size range, and (4) assessment of where the value of the business sits in the market.

Look into the company's strength, weaknesses, opportunities and threats.

Significant amount of ongoing revenue and some long term customer relationships as well as having their own brand and also other brands which worked in their favour.

For brands that really sell well, they have license agreements (some exclusive and some non-exclusive) in place.

The client does not necessarily work in the business as he has management put in place and handles the day-to-day operations.

The valuation provided was acceptable to the clients

Wait and see game as the client has still 3-4 weeks left to go for the deadline on the initial negotiations.

A proper valuation gave the clients a clear picture of the business value.

Understanding and optimising valuation.