The Impact of Blending Valuations

When it comes to determining the value of a private company, there are a lot of factors to consider, as they may impact the value of the company’s underlying securities and in turn, the value of the securities one holds in the company.

One such factor is the methodology for combining multiple valuation approaches into a single company value. Two commonly used practices are the entity level and share level blending techniques.

Today, Nicholas Kyle, Valuations Product Associate within the Ipreo by IHS Markit Private Capital Market Group, explores those two theories in our latest special report.

Here’s an excerpt:

The biggest difference between the two blending approaches is theoretical; exactly, at what point in the valuation process is it appropriate to apply any discounts or weightings? This philosophical difference leads to technical variances between the two methodologies, especially when combining multiple valuation approaches together to reach a single fair value.”

Read the Special Report: How To Blend: A Discussion on the Impact of Blending Valuations