Valuations & M&As

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Financial Services institutions are hard to valuate especially Money Transfer Companies and a number of MSBs. Determining the economic value of a business or company is both a science and an art and experience in the field is crucial, as well as the management of expectations vs. reality. The fair value of a business is needed for a variety of reasons, including sale value if the owners want to exit the market, establishing partner ownership if one partner wants to sell and even divorce proceedings. Owners normally turn to professional business valuators for an objective estimate of the value of the business or to work on justifying the value they have in mind in front of potential buyers.

Mergers & Acquisitions in the Cross-Border Payments industry are occurring at a rapid pace after a slow down during the economic crisis and they follow a pattern very similar to the evolution of the market. In the traditional brick & mortar space, consolidation is taking place as companies need to leverage their fixed costs, increase the volume of operations, grow their agent or payout network, enter a new market or tap into different ethnic groups served by the selling company. There is also a need to diversify operations: a money transfer/remittance firm acquiring a bill payment company or a top-up company buying an Money Transfer Operators (MTOs). The need to combine existing business models to leverage the pros of each side: we have seen virtual currency firms buying MTOs and MTOs buying Forex firms.

We at Mohr World have been active in this space, providing valuation services to firms in the US, Europe, and Latin America. Our Corporate Partner’s experience in the industry, either as owners selling their own businesses, CEO’s managing the selling or acquiring of businesses in this space and experience in Due Diligence processes, make our experience vast and unique. We can help you and be the partner you need in the valuation, selling or the acquisition of a business in the money transfer, remittances & cross-border payment industry.

There are many established methods to estimate the value of a company. At Mohr World we use the method that best suits the company to come up with a fair, valid and justifiable valuation. The so-called “Times Revenue Method” where a stream of revenues generated over a certain period of time is applied to a multiplier is a common way of valuation (one company may be valued at 5x revenue, while another may be valued at 2.5x revenue). That multiplier depends on a great number of factors that need to be evaluated one by one as they raise or lower the multiplier.

The valuation of the company also depends on the buyer;  how easy or difficult the merger and acquisition process might be, how the buyer can leverage the cost savings of taking over in its current structure all or part of the operations of the selling company, increasing the revenue potential of the combined operations.

We can provide you with choices for your valuation process based on different analytical levels depending on your need: they can be very detailed and might take a number of expert hours; they might only take a short period of time. In some cases, we valuate companies as part of a deal to manage the selling process, if we feel we can bring potential buyers to the table and successfully carry out an acquisition. Contact us.

Quietly seeking and managing buyers and sellers in the cross-border payments industry requires time & patience. Sometimes buyers are eager to buy and come to us with companies in mind and work with us on a strategy to reach out and manage the acquisition process. Sometimes business owners want to exit the industry and decide to let us find a suitable company to take over and manage a profitable sale.

Our Corporate Partners and their connections in the industry makes us a perfect choice for many buyers and sellers in the industry. If valuation work is involved we might require exclusivity but if not, we can help you look for prospects and worthwhile opportunities.