Valuation of a fruit & vegetable company

Valuation of a fruit & vegetable company

A company committed to developing innovative applications in fruit and vegetable-growing succeeded in creating technology to improve the products’ appearance at their sales points and wished to value its business.

Challenge

A company developed new technology to the reduce the impact of post-harvest diseases and defects in different types of fruit. Said technology was developed and awaiting regulatory approval.
The company’s shareholders requested a valuation of the business in its current state and of its potential value using different growth scenarios.

Solution

We carried out two studies: a statistical one, analysing the latest financial year’s annual accounts and a dynamic study, analysing different assumptions about future development.
We studied the technology in depth and identified the competition. We calculated the company’s market potential. Then, we performed future projections based on different contingencies and scenarios which included additional business models.
We defined the costs associated with the above projections and we assigned chances of success to each regulatory phase that was pending.

Result

The shareholders understood very well the risks and opportunities that defined each one of the assumptions and proposed scenarios, as well as the related degree of probability.
We analysed the sensitivity of each variable that was key for the valuation.
We established a clear value for the company with associated ranges for the business production scenario (direct sales or third-party licensing).
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