Andrew Barnett Explanation About Valuations Of Mergers And Acquisitions

Andrew Barnett is a native of Florida. He is a resourceful and successful innovator that has worked as a web science, coach, trainer, and facilitator at the Institute for Strategic Leadership Studies. While serving as an RMA Engineer at Apple, he created and implemented tamper-proof stickers at the company.

It helped in the prevention of the illegal opening of warranty units. After serving several years at Apple, Barnett formed a full-fledged PC and Macintosh in a single unit. To know more about the company, visit their webpage on Crunchbase.

About Intrinsic Valuation

Presently, a lot of investors who earlier used to employ the intrinsic approach focus more on the discounted cash flow methodology. The intrinsic value is obtained by considering the estimated future dividends of a business.

When it is discounted by a discount rate, it shows the return requirement of the shareholders on the investment and the rate of growth. This approach considers future cash movement and discounts of a company at a rate similar to the capital cost of the company.

Relative Value Approach

This approach is based on several metrics that are derived from comparing with the peers of the company. This is then compared to the present stock price of the company.

Due to the easy accessibility of the company’s performance information, shareholders and public investors have started considering a relative value approach to perform daily basis stock price analysis.

Deal Valuation for Acquisition, Merger, and Restructurings

In this type of valuation, several approaches are considered to identify the target company.  Several standpoints are determined to figure out whether the company is acquired, sold, or merged at a fair value.

This valuation is carried out in several phases:

  • Look at the stand-alone of parties participating in the transaction.
  • Look at the related values of the transaction for the target firm.
  • Analyse the planned transaction and evaluate its influence on the enduring firm.

Stand Alone Value

The stand-alone value is used to find whether the company is justly valued in the market. In the case of private companies, this type of valuation sets up a standard value for the firm that can be used for negotiation.

The stand-alone value method utilizes a combination of the relative value, expectation approaches, and intrinsic value in the business. The two very important techniques for stand-alone valuation are comparable company analysis and discounted cash flow.


Valuation of Mergers and Acquisitions is performed in a variety of ways. A corporation should understand its needs and goals to determine the right one.