SSI serves security installing contractors providing systems and services; surveillance, access control, biometrics, fire alarm and home control/automation. Coverage in commercial and residential product applications, designs, techniques, operations.
Issue link: https://securitysales.epubxp.com/i/166764
Building Your Business investment in the acquirer's eyes. Buyers tend to pay up for businesses with brand names and market recognition, as well as for companies with a "critical mass" and heft. Smaller companies are perceived to be less valuable than larger companies, all other things being equal. Untapped borrowing power available from an unleveraged balance sheet is attractive, just as substantial looming capital expenditures and deferred maintenance would be viewed as negatives. Synergy, or the ability to combine two or more entities so as to create more overall earning power after the transaction than existed before, often warrants a premium. This example illustrates a conclusion of fair market value that represents a 47% discount CONTROLLING INTEREST EXPLAINED from the enterprise value of $7 million. In this case, that is the price at which transacTe owner of a controlling interest in a business tions of noncontrolling interests would be valued at for estate planning purposes. has the power to direct the management of the enterprise, and if the interest is sufciently large for lack of control is warranted. Te application of such a it also has the ability to singly authorize the sale, merger discount results in the freely traded value of a company, or or dissolution of the enterprise. In contrast, the owner of a the price at which it would trade in an active public market. minority interest lacks all prerogatives of control, including Discounts for lack of control can vary considerably, from less any potential economic benefts that the owner of a controlling than 10% to more than 30%. interest enjoys. In the case of security alarm services companies, recent Minority interests are therefore worth less than a proporpublic transactions suggest that a discount for lack of tionate share of the enterprise value and, thus, a discount control of about 25% might be appropriate. Applying this www.securitysales.com/freeinfo/19217 146 / SECURITYSALES.COM / SEPTEMBER 2013