Do you or your company have “hidden assets” that can drive up your multiple? If you are ready to unearth your own hidden assets, I’d love to help you with that.
This news update in the FT on November 16th caught my eye:
Mars to buy Hotel Chocolat in £534mn deal
The owner of confectionery group Mars has agreed a deal to buy upmarket chocolatier Hotel Chocolat in a cash offer that values the company at around £534mn on a fully diluted basis.
Bidco’s offer values the British cocoa manufacturer at a premium of 169.8 per cent to Hotel Chocolat’s share price of 139p at the close of business on November 15
It first caught my eye as I found it interesting that Mars would buy a specialist UK-based chocolate retailer. “I wonder what Mars sees here?” I thought, so clicked on the article link. What then jumped out at me was that Mars made a cash offer at a 169% premium to the share price the day before. They are paying 1.7x the valuation that the “unseen hand” of the market has decided that Hotel Chocolat is worth. In short, Mars sees that Hotel Chocolat has “hidden assets”, that they have built within their business assets that Mars can now leverage, assets that are worth far more than the “benchmark” for their industry, for the valuation that market analysts can readily see.
The drawing above is the distillation of how to build such assets, where instead of solely focussing on the effort to build the “P“, in increasing the profit year on year as shown on the Income Statement, one focuses on the intellect needed to build the “M“, the multiple of the profit that gives you the “V“, the valuation that a potential buyer can see in your business.
Clients retain me partly for my ability, having listened deeply to understand them and their business, to then have “authentic insights” that can shift their business and its value. Another way of putting this is that I have the knack to see their “hidden assets”, what can drive up their “M”, their multiple.
A few prior articles on these themes for you:
- Make time to choose Intellect over Effort
- Do you know the hidden assets in your business?
- Build Business Valuation – Think in Ink
If you are ready to unearth your own hidden assets, I’d love to help you with that.