Business valuation mandate in the context of the financial restructuring of a travel group

Mandate description

Business valuation mandate carried out on behalf of a French group specialized in tourism, facing a fragile financial situation.

The mission aimed to determine the real economic value of the company prior to the implementation of a comprehensive plan for the recovery and reorganization of capital.

The company, which has a historical reputation in the organized travel market, was facing a complex sectoral context marked by falling demand and rising operating costs.

The evaluation was part of a global strategic support approach, prior to the raising of new financing and the renegotiation of existing debt.

Key issues

The main challenges consisted of:

• Appreciate the residual economic value of a group in difficulty while integrating the prospects for operational recovery;
• Evaluate the sustainability of the economic model in a post-crisis environment;
• and distinguish the operating value from the asset value of fixed and intangible assets.
  

The evaluation mobilized several complementary approaches:

• one performance-based approach, based on adjusted profitability;
• one Multiples of transactions approach, based on a panel of comparable players in the tourism and leisure sector;
• And a discounted cash flow (DCF) approach, integrating a cautious recovery scenario over three years.

Approach and results

The evaluation made it possible to determine a prudent economic value interval, serving as a reference for renegotiation with creditors and potential investors.

The conclusions also served to fuel discussions relating to the restructuring of capital and the valuation of participations held in subsidiaries.

This mission was the first step in a global support system, including also the evaluation of financial instruments and the group's brand.