BVWire attended the ASA Advanced Business Valuation Conference in Boca Raton, Fla.—it was loaded with interesting topics and excellent speakers. Here are just a few takeaways (more next week):
- Keynote speaker economist Bernard Baumohl (The Economic Outlook Group) believes there will be stronger economic growth next year once uncertainty subsides over the presidential election.
- Companies on the block that are represented by an investment banker command a 20% premium when sold, so take that into account when looking at multiples in transaction data, advises Michael Poole (PCE Investment Bankers Inc.).
- Rajiv Gokhale (Compass Lexecon) presented an enhanced multiple corporate valuation model—not a replacement for CAPM, but it adds another point that’s “worth testing.” He co-wrote a paper on this method that’s available here. The authors are looking for feedback.
- There was a mock trial session that was excellent! All six disciplines were put on the “stand,” and the mock trial demonstrated how skilled opposing counsel can skewer even the best valuation report in court. Attorney Peter L. Gladstone (Gladstone & Weissman, P.A.) played the role of counsel for both sides, first eliciting direct testimony and then putting on his other hat to do the cross of each of the six expert witnesses. He succeeded in poking holes in all of their reports. His advice: Tell your attorney about weaknesses that could undermine your report in order to prepare for the witness stand. “Don’t keep it to yourself,” he says.
- Company-specific risk premiums range from 30% to 40% for firms in the legal marijuana industry, reports Ron Seigneur (Seigneur Gustafson LLP).
- For sports franchises, broadcast rights are now just as valuable as box-office ticket sales, says Drew Dorweiler (Dartmouth Partners Limited).
Next week’s BVWire will have some more takeaways. We congratulate the conference planning committee for an excellent event: conference chair Gary Trugman (Trugman Valuation Associates Inc.), Hernando Gomez (Morrison, Brown, Argiz & Farra LLC), Tracy Lamb (PCE Companies), Adam McArthur (CBIZ Inc.), Susan M. Saidens (SMS Valuation & Financial Forensics), and Jeffrey S. Tarbell (Houlihan Lokey).
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