Business Valuation Mandate for an Industrial Group Strategic Review
Independent valuation of a diversified industrial group conducted as part of an internal strategic review
Description of the mandate: valuation of a French multi-site industrial group for strategic review
The engagement focused on the determination of the real economic value of a French industrial group active in the formulation, transformation and distribution of technical products for aerospace, energy and automotive. The business valuation took place as part of an internal strategic review ahead of the update of the financing plan and the preparation of future external growth transactions.
The analysis covered a multi-site and multi-country perimeter with consolidation of performance and a differentiated sector reading.
Key challenges: consolidating the performance of a diversified industrial group and reading margin resilience
The main challenges of the mandate were:
- measuring the consolidated economic performance of a multi-site and multi-country group;
- identifying value-creation levers linked to sector diversification (aero/energy/auto);
- assessing margin resilience in a context of evolving production costs and supply chains;
- providing a reference for updating the financing plan and external growth.
Approach and outcomes: cross-checking DCF, European comparable multiples and WACC sensitivity analysis
The valuation deployed several complementary approaches:
- a discounted cash flow (DCF) approach, based on sector-specific business forecasts detailed by segment (aerospace, energy, automotive);
- a market multiples approach based on a panel of comparable European industrial companies;
- a comprehensive sensitivity analysis on the cost of capital (WACC), growth assumptions and consolidated profitability;
- a sum-of-the-parts reading by business segment enabling the identification of higher-profitability activities.
The work enabled the definition of a coherent and defensible value range, validated by the finance department and serving as a reference within the strategic review. The analysis also documented the group's differentiating factors: technological innovation, industrial tool quality and geographic diversification.
Illustrative example: numerical application to a multi-segment industrial group
For illustrative purposes only — unrelated to the actual data of the mandate — an industrial group generating EUR 250M in revenue with consolidated EBITDA of EUR 35M (14% margin) could exhibit an enterprise value range of between EUR 245M and 385M based on 7.0x to 11.0x EBITDA multiples observed in processing industries. A sum-of-the-parts reading weighting multiples by segment (aero 12.0x, energy 9.0x, auto 7.0x) refines the valuation and documents strategic trade-offs (divestment of a non-core division).
Summary: 5-week mandate, two cross-checked methods with sensitivities, basis for strategic review
Business valuation mandate delivered in 5 weeks for a French multi-site industrial group. Two cross-checked methods (DCF by segment, European comparable multiples) with comprehensive sensitivity analysis on WACC, growth and profitability. Deliverable: independent report validated by the finance department, serving as a reference for strategic review and preparation of external growth.
Frequently asked questions: sum-of-the-parts, European comparables and industrial WACC
Why a sum-of-the-parts reading for a diversified group?
A sum-of-the-parts reading consists of valuing each business segment independently, with its own sector multiple, then aggregating the results. It enables (i) capturing the sector premium specific to each activity, (ii) identifying discounted segments likely to be sold to a specialised acquirer, (iii) documenting a portfolio simplification trajectory.
What multiples for European aerospace industry?
For European aerospace suppliers and processors, observed EV/EBITDA multiples range between 9.0x and 14.0x, with a premium for players on long-cycle programmes (Safran, Liebherr, Latécoère, Figeac Aero). To go further: sector multiples.
How to calibrate the WACC of a multi-country industrial group?
The WACC of a multi-country industrial group incorporates (i) a cost of equity weighted by country via the sector beta and the country risk premium, (ii) a cost of debt reflecting the consolidated financial structure, (iii) a target D/E weighting.
How long does a multi-site group valuation take?
The standard duration is 4 to 7 weeks, depending on perimeter complexity (number of sites, segments, countries), consolidation quality and the depth of available sector forecasts. The mandate described was completed in 5 weeks.
What articulation with an external growth plan?
The valuation feeds the external growth plan via (i) an investment capacity calculated from enterprise value and target debt structure, (ii) a reference for transaction multiples in any acquisitions, (iii) a possible LBO scenario if external growth requires significant leverage. To go further: financial structuring.
Can the report be presented to banks?
Yes. A methodologically robust independent report constitutes a credible reference for the bank pool as part of the financing plan update, renewal of credit lines or acquisition financing. The documentation of assumptions and sensitivities strengthens lender confidence.
Similar mandates: other business valuations in industry
The transactions shown include those completed by, or with the involvement of, Hectelion team members in current or previous professional roles. They are presented for illustrative purposes only and do not imply exclusive responsibility by Hectelion.
Discover our TRACK RECORD
The transactions presented were carried out by, with the contribution of, or with the participation of members of the Hectelion team in the context of functions performed currently or previously.