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Distribution and Wholesaler valuations

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Distribution and Wholesaler valuations

At Lotus Amity we provide distribution and wholesaler valuations. We provide these business and equity valuations in transactions, in disputes and for tax purposes.

A key focus for our distribution and wholesale valuations is the stock held by the entity and the rate of return required on those assets, the age of the stock, the stock turnover and the comparison with industry benchmarks.

Other key valuation components include the  supplier and supplier agreements and whether any exclusive distributor agreement and the terms of that agreement, competitive advantage, product mix, customer concentration, commercial customer contracts, barriers to entry, exposure to and outlook for the industries it operates in and working capital requirements.

Given the asset base of a distributor business there is the potential to secure debt against the assets.  Debt holders typically require a lower return than equity holders, due to the security of the debt on assets.  The return debt holders require depends on factors such as default risk, being the risk the entity in unable to service the debt. 

Experience

Distribution and wholesaler valuation engagements have included:

  • Valuation of thirty-five fuel stations and gas distributor business to assist in mediation due to a compulsory acquisition of land
  • Valuation of a large wholesale distributor business of outdoor leisure products; valuation required for a potential share acquisition
  • Valuation of a component distributor business; valuation required for a potential transaction
  • Valuation of a national hair product distributor business holding an exclusive distributor with hair salon wholesale and health & beauty salon customers; report prepared for a shareholder restructure
  • Expert witness valuation of a steel distributor business distributing sheds and fencing; joint appointment for family law purposes
  • Valuation of an air-conditioning distributor business to assist the minority shareholder claiming damages for oppression
  • Valuation of an electrical distributor business; valuation required to assist in a transaction
  • Valuations of the assets and goodwill of a wholesale lighting business in relation to misleading and deceptive representations; report prepared for the Federal Court. Trade Practices (ACL)
  • Critique of an independent valuation report of an importer and distributor business; report prepared for the Federal Circuit Court of Australia

Why choose Lotus Amity for distribution and wholesaler valuations?

Granular and comprehensive approach. We provide a granular and comprehensive approach to valuation. This includes modelling cash flows and discount rates and providing fully referenced appendices.

Detailed analysis. Each valuation has a story. We carefully research, analyse and explain each valuation story and how the numbers (the cash flows and discount rate) relate to that story.

Compliance. Our reports comply with the Australian accounting, ethical and valuation standards, the International Valuation Standards and the relevant expert witness requirements.

Quality Control. Each valuation report and model is reviewed for accuracy, completeness and transparency by an external firm of Chartered Accountants and business valuation specialists