Purchase price allocation on a transaction in Asia

Sector of activity: Consumer products
Size of company purchased (sales in €m): 500

Context

  • The buying group announced a transaction aimed at strengthening its presence in Asia
  • The group wished to proceed with purchase price allocation by using external consultants to value the target’s principal intangible assets and determine goodwill resulting from the operation

Our mission

  • Identification of the target’s principal intangible assets (brand, customer relationships, etc.)
  • Analysis of the characteristics of each asset
  • Preparation of valuation models for each intangible asset
  • Implementation of sensitivity analyses on the different value levels
  • Determination of “residual” goodwill and rationalization of its amount
  • Presentation of the work in a detailed and didactic report

Results

  • The buying group was able to present the price allocation to its auditors and prepare its consolidated financial statements incorporating the target’s assets and liabilities

Key success factors

  • Knowledge of the buying group and sector trends
  • Understanding of issues related to the price allocation on the group’s consolidated financial statements
  • Recognized technical expertise, particularly in valuation of intangible assets
  • Ability to rapidly mobilize our partners in Asia to help us address local issues