BTG provides independent valuation review for Employee Ownership Trust transaction

The Challenge

Two majority shareholders in an estate agency and conveyancing group wished to transfer their shares into an Employee Ownership Trust at no more than market value, as evaluated by the business's accountants. BTG were instructed on behalf of the trustees to conduct a thorough and independent review of the accountant's valuation and to ensure compliance with the requirements for Employee Ownership Trust transaction.

Our Approach

We conducted comprehensive review of the accountant's calculations, examining methodology, assumptions, and underlying data. Drawing on our business valuation expertise and estate agency sector understanding, we prepared alternative calculations based on independent research and valuation theory, benchmarking the accountant's work against our findings to identify concerns.

The Outcome

Our work identified several flaws in the accountant's valuation methodology and calculations. However, we ultimately concluded their valuation was indeed not more than market value, both on a pro rata basis and when applying appropriate discount for lack of outright control. We documented our findings in a comprehensive advisory report to the trustees, setting out our analysis, conclusions and recommendations which allowed the share transfer to proceed.