Consolidated Digital Asset Portfolio With A Collective Valuation?

November 27, 2022

by a searcher from The University of Michigan - Stephen M. Ross School of Business in Michigan, USA

I recently came across a company for sale whose primary revenue was from owning a portfolio of 30 branded digital assets. This includes SEO Blogs, Affiliates, Youtube Channels, Social media, Whitelabel products (sold on Shopify, Amazon and Wordpress websites), along with an email list of about 4K. It appears to have a sound infrastructure, with established SOP's, organized books and is run by a combination of VA's and a local management team.

The valuation however is based on the collective revenue rather than each asset and their respective verticals--which in my opinion suggests potential upside, but also shines light on the potential risk. That said, my question is--pertaining to either an acquisition or an exit-- would this be considered as a viable method to determine value in the eyes of a lender and/or investor?

Reply by an intermediary
from The University of Chicago in Chicago, IL, USA

You should consider both approaches. The odds are collective revenue will give you lower value. It is also possible that financials may not allow you to value each asset if there are corporate services and intra-company transactions. And seller very likely will not stand behind individual assets but will be willing to do so on collective business.
Happy to discuss this issue on two ttansactions.

Reply by a searcher
from Brigham Young University in Salt Lake City, UT, USA

Hey ^redacted‌ I'd love to hear where you landed with this opportunity! Where was the deal sourced and how did you end up valuing the business? Cheers!

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