How Sell-side Advisors Help Optimise Valuation Credibility

Achieving optimal valuation is the key goal for both sellers and advisors in sell-side mergers and acquisitions (M&A) transactions. However, many deals fail to progress due to the expected valuations being not credibly justified.

The buyers might perceive the valuation to be indefensible and over-inflated without rational proof. When the logic of valuation is clouded during the initial phase, decision-making proceedings will already be compromised. Previous issues might result in misaligned price expectations and prolonged unproductive negotiations.

Overly optimistic valuation usually stems from the seller's emotional investment from years of building the business. Without support from verified facts, the founders' overconfidence might bias the assessment of future growth, resulting in a distorted valuation.