valuation
Company valuation estimates the worth of a legal entity and its claims—typically the shares—after deciding which assets, liabilities and cash flows sit inside that entity. It is the same craft as business valuation, but the unit of analysis is the company (or group) rather than a loosely defined 'business'.
Company valuation fails most often at the boundary of the entity. A founder says "the company is worth 10 times EBITDA" while the EBITDA sits in three operating subsidiaries, a property company holds the warehouse, and a shareholder current account is neither debt nor equity in the buyer's mind. The first professional step is to lock the perimeter: which legal entities, contracts, employees and assets transfer, and which stay with the seller.
That is why company valuation and business valuation are siblings rather than synonyms. The business is the economic engine. The company is the bundle of legal claims a buyer can actually acquire.
Once the perimeter is fixed, value the operations as enterprise value, then allocate that value across capital providers:
Equity value (company) = EV − net debt − NCI − preferred + non-operating surplus assets
Listed groups also have an observed market value of equity (market capitalisation). Private companies do not; their equity value is modelled. Fair value under IFRS 13 may be required for financial reporting; intrinsic value is the analyst's fundamental view. They can diverge for years.
Holding companies, minorities and intra-group balances change the answer. Sum-of-the-parts is the usual tool when segments have different risk and peer sets. Valuing only the parent company's statutory accounts is a common error in continental groups.
Lumen Dental Group is an invented four-clinic platform, used only as an illustration.
| Perimeter item | Treatment |
|---|---|
| Four clinic companies | Inside the deal; EV built on consolidated, normalised EBITDA of €3.1m |
| Property SPV (clinics' buildings) | Out of perimeter unless SPA includes it; rent reset to market in the model |
| Founder current account €0.8m | Debt-like; deducted in the equity bridge |
| Cash in operating companies €0.4m | Surplus cash credited in net debt |
| Selected EV | €24.8m (8.0x €3.1m) |
| Implied equity for 100% of the four OpCos | €24.8m − €4.6m net debt-like items + €0.4m surplus cash = €20.6m |
A buyer who "buys the company" without this bridge is not buying the same thing the seller thinks they are selling.
Share purchase agreements price equity; locked-box or completion-accounts mechanics then true-up cash, debt and working capital to the valuation date. Investors therefore underwrite company value as a set of SPA definitions, not a spreadsheet headline. Diligence that cannot map EBITDA to the entities in the structure will reopen price.
Legal form, change-of-control clauses and minority protections can make two companies with identical cash flows unequal in the hands of a buyer. AICPA VS Section 100 and IVS both require the valuation analyst to state the interest being valued (control vs minority, marketable vs not). Skipping that sentence makes the conclusion legally and economically incomplete.
On Dazur, company valuation starts with a clean entity map: what a buyer can wire money for on closing night. Owners who separate operating companies from property, related-party balances and surplus cash get tighter offers because the SPA and the model finally describe the same firm.