The development of the methodical approach to value business appraisal within the integration policy for industrial enterprises

M Karelina,A.A Radionov,A.V Babkin,T.A Khudyakova,A.V Keller,I.A Bayev,V.V Savaley,Y.B Kolbachev,A.V Shmidt

doi:10.1051/shsconf/20173501135

Abstract

At present, a positive trend in the development of corporate integration processes in industrial economics of the Russian Federation is frequently accompanied by a negative dynamics in their efficiency indicators. This causes the necessity for development of an integrated approach to integration transaction valuation using mathematical and statistical methods of research in order to increase the competitiveness of the Russian industry under conditions of the economic sanctions. The paper presents the methodical approach developed to value business appraisal of industrial enterprises based on the integration of profitable, cost-based, sales comparative approaches and the method of real options using weights Fishburne. In this paper, we propose a methodical approach that provides an integrated value appraisal of the target company and preliminary substantiates the expediency of mergers and acquisitions. In addition, this methodical approach is the foundation for high quality and reliable evaluation of the synergistic effect.

Highlights

Mergers and acquisitions taking place in business are aimed at increasing its scope and market share and becoming important factors for increasing the competitiveness under conditions of the economic sanctions against Russia, volatility of foreign exchange markets, and price reduction of raw materials
The International Valuation Standards published by the International Valuation Standards Committee as well as guides to the standards issued in 2007 represented the definitions of different types of costs, valuation types, including at the mergers and acquisitions
In many areas of business appraisal in Russia, the empirical data on the base of which it is possible to calculate the size of the control premium is closed and not available in many cases

Summary

Introduction

Mergers and acquisitions taking place in business are aimed at increasing its scope and market share and becoming important factors for increasing the competitiveness under conditions of the economic sanctions against Russia, volatility of foreign exchange markets, and price reduction of raw materials. Where FCFFi is free cash flow to the firm of i-th year; rCAPM is the discount rate determined on the base of the capital asset pricing model; TV is terminal value; D is net debt of company. According to the Olson model, the company’s value at time t is equal to the initial "accounting" value of the company plus the sum of discounted abnormal incomes: VtOL b0. The substitution of the initial data in (11) and (12) results in the value of the coal company equal to V BS | 379.48mln USD in accordance to the BlackScholes model. The integrated value appraisal of the coal company was calculated based on Table 6 Vɢɧɬ 463,99mln USD

T pi 12

Conclusion