In December 2020 – January 2021, Navigator Consulting completed a rapid valuation of an industrial components firm active in Cyprus and Central Europe. The objective of the valuation was to establish the fair market value for a change in the ultimate beneficial owner of the company.
Limassol, Cyprus: 25 January 2021
The changing regulatory environment in Europe is driving a consolidation and restructuring in corporate holding structures and inter-group holdings.
Specifically, the adaptation of Common Reporting Standards (CRS) and AML/KYC requirements under DAC has led to a fundamental re-think on how international business transactions and holdings are structured.
Our client was established in Cyprus thirty years ago, and is active in the sale, installation and maintenance of highly complex industrial components and platforms. The company sells across multiple segments, including oil and gas, chemical plants, heavy equipment, power generation and related areas.
Although the Cyprus company complies with national and international law, the changing regulatory requirements place a substantial new burden on operations. This is despite the fact that all operations take place within the European Union – a clear inditement of the failure of the Single Market.
Our responsibilities included:
Analysis of current international operations, including value chain, related party sales, representation agreements and suppliers;
Financial consolidation and analysis of profit/loss, balance sheet and cash flow;
Preparation of a 5-year future forecast as a stand-alone enterprise;
Valuation based on discounted cash flow and net present value using International Valuation Standards Council methods.
The resulting valuation report provided an operational and strategic guidance for our Cyprus client in terms of current and future operations.
As the regulatory requirements imposed across Europe continue to increase, we understand that an increasing number of small and medium enterprises will need to restructure their operations to avoid high and unnecessary compliance burdens and penalties.
Please contact us for further assistance or information in this area.