Assessing the value of shareholdings in six companies on a potential sale

Ensors were recently engaged as a single joint expert for Court purposes to assess the value of a series of interests in six companies which were held by two parties during the division of a marital estate.

We were instructed to consider the value of the various shareholdings on a potential sale. We also looked at the liquidity in the companies and the sustainable income that could be withdrawn from the various companies in the future. The effect on the valuation of the two parties’ interests of any inter-connected company transactions was also assessed.

As a firm, Ensors are very experienced in Court work and to provide a balanced view, we calculated the valuation for each of the six companies using either the earnings method or net asset method, depending on the different circumstances at each one.

In addition, we calculated what the tax consequences on a sale of the parties’ interests would be with the tax implications to include: capital gains on notional sale, tax which would be charged on salary/dividend extraction going forward. We considered the potential minority discounts and also assessed the liquidity in the business to give a view on the funds which could be extracted to facilitate a settlement. The potential future sustainable earnings from the companies were also calculated.