Valuation for the purpose of group merger

Client Industry :  Automobile Industry

Background:

The group was mainly engaged in the manufacturing of tyres. It had undergone a scheme of amalgamation where 13 companies were merging into another company. The objective of the merger was to re-organize and discontinue the non-operational entities in most efficient and economical manner.  Thus, the client approached us to determine valuation of 14 entities and appropriate share exchange ratio/swap ratio for the said purpose.

Our Approach :

• Our valuation team worked jointly with the management and Merger and Acquisition team of the client to understand the objective of said re- organisation and the status of the current business operations of the involved entities
• We conducted the valuation using the appropriate methodology and computed share exchange ratio/swap ratio to determine number of shares to be issued to the transferor companies by the transferee company under the proposed merger
• We also prepared an accounting memo for the client for the purpose of preparing post- merger financial statements

Outcome/Impact :

We successfully conducted the valuation and computed share exchange ratio/swap ratio within the given timeline. This, in turn, helped the client in filing the application with NCLT as per the proposed timelines.