Business Valuation for a Family Shareholder Buyout

A family-owned cold-storage and fish-processing business based in Walvis Bay, operating for 22 years, where two of the four sibling shareholders wanted to exit and needed an independent valuation of the business before agreeing on a buyout price.

The family had reached an impasse: the two exiting shareholders believed the business was worth significantly more than the two continuing shareholders were willing to pay. Both sides had informally estimated value using different methods and had reached figures that were NAD 12 million apart. Without an independent valuation, the dispute was heading toward litigation. The business had never been formally valued and had no audited financial statements for the prior two years.

We were engaged by the family as a neutral third party to produce an independent valuation. We prepared normalised financial statements for the prior three years, stripping out owner-related expenses and adjusting for working capital movements. We applied three valuation methodologies: a discounted cash flow analysis, an earnings-based multiple approach using comparable transactions in the Namibian food processing sector, and an adjusted net asset value method. We presented the results to all four shareholders with full workings and a written valuation report.

Independent valuation report accepted by all four shareholders. A buyout price was agreed within the range supported by the report. The transaction was completed without litigation. The two continuing shareholders have retained us as their ongoing accounting and advisory firm.