We are at the beginning of the era of technology-driven changes in society, industry and research. The importance of the use of technology is growing steadily and playing an increasingly important role in Mergers & Acquisitions, or rather the use of technology represents the greatest value driver. The valuation of technology-dependent assets is therefore becoming increasingly important within Merger & Acquisitions situations. Especially in the technology field, the sharp separation between claimed and actual assets, as well as the consideration of temporal implications, resulting from dynamic technology development, is of essential importance for the valuation of transaction structures. Investors rely on the analysis and valuation competence of COREadvisory, based on deep domain knowledge, high methodological competence and long-standing experience, particularly in large M&A transactions with a high quantity of technology.
An institution's information technology assets are divided into hardware and software, as well as the capability to couple both over long periods and many release iterations in a value-driving manner. Typically, in M&A situations it is shown that the reported investment and real values in the technology context deviate statistically from each other positively and negatively in a normal distribution. The sustained positive deviation requires a competent and methodically oriented IT mangement, which is also stable regarding its processes. In COREadvisory, both the technological and the managerial dimensions are subjected to a review and appropriate valuation, in order to identify an investor's potential risks at an early stage.
The IT infrastructure, consisting of hardware, network and software, usually has two states of aggregation. In one state, the basic infrastructure is used over very long periods of time with high benefit, and has a direct value-adding effect. In the other state, the basic infrastructure becomes obsolete or essential components do so in a very short period of time, i.e. the components, although not depreciated, have a value-decreasing effect. The valuation by COREadvisory covers both, the balance sheet and the technological dimension and, as a result, leads to an appropriate re-evaluation of estimated or presumed value disposals. These analyses support investors or relevant decision-makers, when assessing leeway regarding negotiations or other relevant decision-making processes.
The combination in the valuation of intangible assets and real values strengthens reciprocally in the technology context, positively as well as negatively. These effects are understood, but can only be identified and managed through many years of experience, a high understanding of technology and methodical competence, which is why support from tax, legal/M&A and strategy has only a limited effect. Therefore, our experts at COREadvisory are sought-after contacts when it comes to processes in which valuation of strategic assets, such as the technologies used, is carried out and incorporated into overarching decision-making processes. As a result of this competence admixture, disproportionately high value can be achieved and risks of considerable magnitude within the investment process can be identified at an early stage.