Corporate Control

 

Corporate control operations, such as M&A, Private Equity, or Venture Capital deals, create value when stakeholders see their position improved, and revise the assets' market price upwards. Therefore, the critical factor of the analysis of a corporate control operation is the identification of the key value drivers.

 

At Watson & Noble, we use Real Option Valuation to capture the total value of a corporate control operation. Such total value includes both the net value of the whole operation and the value of the resizing possibilities.

 

Real Options Valuation allows us to combine the value of the synergistic value and the value of flexibility. 

Synergistic value is the main focus of a corporate control operation. Yet, there is more value to the operation than that of the synergy set in place with the combination of the assets of the companies.

 

The additional value that shall be included in the analysis is the value of flexibility, that is, the value of the possibility of resetting the company's strategy. At Watson & Noble, we valuate both synergistic value and the value of flexibility to better determine the actual value of the corporate control operation.