M&A Valuations in the Real World


About the Episode

The world of appraisals and valuations is full of jargon and terms not often heard in the M&A world, such as strategic, investment, and fair value. Abhi Mathews, a chartered financial analyst, clarifies these terms, laying the theoretical groundwork on how appraisals work, and placing it all in the real world. He explains the different asset classes appraisals cover, how appraisals differ from business valuations, what period a valuation is based on, the role of an appraiser in an M&A transaction, and much more.

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In this Episode

1:57 What is a fairness opinion? What types of transactions is a fairness opinion used for?
3:30 What is a chartered financial analyst (CFA) charter? Who typically gets a CFA charter designation?
6:32 How is the CFA curriculum different from the curriculum for getting an appraisal certification?
9:47 Is there a substantial difference in reports needed when preparing an appraisal for court purposes versus for non-legal transaction purposes?
12:30 What is the first step in the appraisal process?
14:20 What is the standard of value for an investment, and how does it impact an appraisal?
19:23 What is the most challenging part of preparing an appraisal?
20:36 What are the common methods of appraising a middle-market business?
24:34 What is discounted cash flow (DCF)?
26:58 What are your thoughts about multiples from an appraiser’s point of view?
31:44 What other methods are used in an appraisal besides a discounted cash flow rate?
35:16 How much subjectivity is there in appraisals?
37:54 What is the role of an appraiser in an M&A transaction?
48:44 Is a CPA qualified to appraise a company?
50:40 What role does an appraiser’s bias play, and how can it impact the appraisal?
57:39 Where is the appraisal world heading in the next 10 to 20 years?

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Meet Our Guest

Abhi Mathews

Abhi Mathews

Managing Director at Castle Placement LLC

Abhi Mathews is a Managing Director at Castle Placement LLC and a Principal at Minerva Valuations Inc. He has structured and assisted in raising Equity capital, senior debt, debentures, convertible notes, and preferred shares for public and private entities. He has qualified as a financial expert, and produced valuations, ranging from advisory M&A reports to shareholder and matrimonial dispute valuations reports.

Abhi founded a children’s regional not-for-profit organization and has been the treasurer for a local children’s not-for-profit organization. He is an advisor to management teams and to ownership groups with small to medium-sized businesses in a variety of industries, both in the United States and in Canada.

Abhi has a Bachelor’s in Accounting from the University of Waterloo and attended the University of Connecticut for a Master’s in Accounting. He is a member of the American Society of Appraisers, the Canadian Institute of Chartered Business Valuators, and of the CFA Institute. He holds his Series 7, 63, and SIE licenses from FINRA.

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