Global BV News: Valuation disputes derail many deals in Africa

BVWireIssue #176-4
May 24, 2017

Disagreements over the valuation of assets along with the transparency of the financial information available for review in the dealmaking process are often key factors in the ability to complete transactions in Africa. These factors are also important for the success of post-transaction integration, according to the “PwC Valuation Methodology Survey,” 8th edition.

The survey found that, across the continent, nearly 40% of deals fell apart because the parties could not agree on a valuation. There are a number of reasons for that, chief among them are being valuation-related issues such as an inability to forecast how the assets will grow or respond to competitors, as well as the overall lack of reliability of multiples and comparable assets across the continent.

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