Equity value

Equity value (valeur des capitaux propres) represents the value of a company's net assets attributable to shareholders — the price an investor would pay to acquire 100% of the equity. It is derived from enterprise value by subtracting net financial debt and all debt-like items, and adding cash and cash-like items: Equity Value = EV - Net Debt. In complex capital structures with multiple share classes, the total equity value is then allocated between preferred shares, common shares and option holders using waterfall models (OPM, PWERM). It is the amount effectively received by selling shareholders in an M&A transaction.

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Example: a Swiss company is valued at CHF 20.0 million EV. Net financial debt comprises CHF 5.5 million of bank loans, CHF 1.2 million of IFRS 16 lease liabilities and CHF 800,000 of shareholder loans, less CHF 1.8 million of cash — net debt of CHF 5.7 million. Equity value = CHF 20.0 - 5.7 = CHF 14.3 million. This is the actual amount distributed to selling shareholders at closing.

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Hectelion builds precise equity value bridges in every transaction, documenting each debt and cash-like item to prevent post-closing disputes on the actual price paid.