Second opinion on business valuation: When and why?
A second opinion on a business valuation is a reassessment of a previously performed valuation by an independent and certified expert. This is often requested when one or more parties have doubts about the accuracy or independence of a previously prepared valuation report. A second opinion can also provide a solution in the event of conflicts or legal disputes. A second opinion not only offers a reassessment but also peace of mind, transparency, and a solid foundation for further decision-making.
Why get a second opinion or fairness opinion?
1. Doubts about a previous valuation
A previously prepared valuation report may be incomplete, based on incorrect assumptions, or prepared by a party with a (perceived) interest in the outcome. In such cases, a second opinion offers an objective reassessment.
2. Business or personal conflicts
In disputes between shareholders, family members, or other stakeholders, an independent appraisal is essential for finding a solution. This can be the case, for example, in divorce cases, acquisitions within the family or when a partner withdraws.
3. Legal proceedings
In legal proceedings, the judge can appoint an independent expert to arrive at a binding or advisory valuation. Our Registered Valuators are regularly asked to act in such situations.
4. Fairness opinion in transactions
A fairness opinion is an independent assessment of the reasonableness of an agreed transaction price, for example in the case of buy or sale of shares. This provides comfort to shareholders, directors, and supervisory board members that the transaction takes place at a fair market price.
What elements does an objective business valuation consist of?
An objective business valuation consists of multiple financial and strategic analyses that together provide a complete picture of a company's value. When conducting a second opinion or fairness opinion, the following elements are assessed, among others:
Earning capacity
: The core of any valuation is the company's earning capacity, often expressed as EBITDA or EBIT. This provides insight into the structural profit level and forms the basis for future cash flows.
Cash flows
: Both historical and projected cash flows are analyzed. These provide insight into the company's ability to generate shareholder value.
Risk profile
: The risks to which the company is exposed, such as market risk, operational risk and dependence on suppliers or customers, directly influence the discount rate and thus the value.
Balance sheet position
: The composition of assets and liabilities, such as working capital, debt, and cash, is included in the valuation. This partly determines the company's economic value.
Similar transactions
: Transaction data from similar companies within the sector are used as a benchmark. This helps in comparing the results of other valuation methods.
Intellectual property and contracts
: Valuable assets such as customer relationships, brand names, patents, or long-term contracts are identified separately and included in the assessment of the total enterprise value.
A second opinion in 5 steps
Obtaining a second opinion is a careful and transparent process. Below you can see how we work:
1. Introduction and analysis of the situation
During an initial consultation, we'll identify your needs and discuss the existing valuation report and any concerns or points of contention. We'll also assess the interests of the parties involved and the intended purpose of the second opinion.
2. Custom proposal
You'll receive a clear quote explaining our approach, schedule, and costs. Depending on the situation, we'll determine whether we'll act as a third-party expert or an independent expert.
3. Collecting documentation
We request all relevant documents, such as previous valuation reports, annual accounts, forecasts, contracts, and additional company-specific information. This allows us to fully and substantively reassess the valuation.
4. Execution of the valuation
Our Registered Valuators carry out a full revaluation based on recognised valuation methods, such as Discounted Cash Flow (DCF) method and Adjusted Present Value (APV) method. We use current market insights and objective principles.
5. Reporting and explanation
You'll receive a clear and well-substantiated report outlining our findings. If desired, we can explain the report in person, for example, in the presence of other stakeholders or the judge, so you can be assured of a clear and well-supported outcome.
Benefits of a second opinion or fairness opinion
Obtaining a second opinion or fairness opinion is not only relevant in cases of doubt or disputes, but also offers strategic advantages for informed decision-making. Here are some key benefits:
Objectivity and reliability
: Our second opinions are completely independent and based on recognized valuation standards. You'll receive an assessment you can use in negotiations, disputes, or legal proceedings.
Understanding critical assumptions
: We analyze the assumptions in the original report and indicate whether they are realistic and substantiated. This provides clarity and prevents incorrect decision-making.
Dispute support
: A second opinion can help resolve conflicts and prevent lengthy legal proceedings.
Security in transactions
: A fairness opinion ensures transparency in acquisitions and market entry. This strengthens the trust of all parties involved.
A second opinion or fairness opinion requires careful consideration from an experienced and independent party. At Match Plan, we're happy to help you with a clear, well-founded, and objective assessment of your company's value, giving you a strong position in any negotiation or legal proceedings.
Tips for getting a second opinion
Choose an independent party
: Make sure that the expert has no interest in the outcome of the valuation and is recognized as a Registered Valuator.
Provide complete documentation
: A second opinion is only as good as the information it's based on. Therefore, provide all relevant documents for a thorough analysis.
Ask for clear substantiation
: A good report includes not only the outcome but also the methods, assumptions, and scenario analyses used. This prevents subsequent discussions.
Involve the right stakeholders in time
: Ensure that all relevant parties, such as shareholders, legal advisors, or other advisors, are informed and involved in the process in a timely manner. This prevents delays and strengthens support for the outcome.
Why choose Match Plan?
At Match Plan, we combine over 30 years of experience with in-depth expertise in business valuations. We can help you with:
- Independently assessing existing valuation reports.
- Providing second opinions and fairness opinions in disputes or transactions.
- Drawing up binding valuation reports on behalf of the court.
- Providing clear advice in complex situations.
Our Registered Valuators are among the best in the Netherlands. Of the approximately 300 active Registered Valuators in the Netherlands, five work for Match Plan. This guarantees you expertise, independence, and reliability. Contact us and discover how we can help you obtain an objective and accurate valuation for your company.
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