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    Valuations in a joint venture context

    Expert advice on joint ventures across the entire project cycle

    Maximising value for your joint venture deal

    There are a number of key valuations issues involving a joint venture (JV). These include but are not limited to the feasibility of the joint venture, what each party is contributing to the JV, the distribution of value between partners and the distribution of synergistic benefits between the partners.

    Our valuations team has extensive experience in advising clients on the set-up and dissolution of joint ventures. We “think like the principal” and align our effort with yours to deliver maximum value at every stage. Right from the first broad feasibility assessment to post-deal valuations, we support you to make an informed decision regarding your JV deal.

    Key issues we can help you with:

    1. What can the parties contribute to a potential JV?
    2. How can these unique assets / contributions be valued? Can potential synergies be quantified to assess feasibility of the JV?
    3. How does a jointly agreed financial model look like, including alignment in operations, financial reporting and tax?
    4. Will the asset valuations under the IFRS3 requirements have material impact on the JV’s / JV partners’ financial statements?
    5. Do the JV partners have any ‘must-be-transferred’ debt-like items which may have material impact on the equity split?

    Our joint venture services

    We are equipped to assist you with all aspects of a JV deal. We align the pricing approach and the key business drivers between the partners, reducing complexity of deal parameters to drive value preservation. While closing the deal, we deliver value through a quick and streamlined compliance process.

    1. JV feasibility assessment:

      We support you with the initial modelling and valuation for the deal, considering interim agreements or arm’s-length adjustments.

    2. Combined business model and initial equity split:

      We help with preparing a robust combined financial model with projected cash flows, including the expected synergies. We also highlight key value drivers for the partners.

    3. Equalisation mechanism:

      We assist decision makers determine potential equalisation items in order to achieve the required equity split.

    4. Post-deal accounting related valuations:

      We help you ensure smooth compliance and value assets and liabilities as per regulatory requirement.

    5. Future-proof value preservation:

      We plan for and help ensure value preservation in the event that the JV is dissolved at some point in the future.

       

    Our deal advisory insights

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    KPMG combines our multi-disciplinary approach with deep, practical industry knowledge to help clients meet challenges and respond to opportunities. Connect with our team to start the conversation.

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