How do you work with an owner to lower their asset valuation?

by a searcher from California Maritime Academy

4 years ago

I am searching for a deal in an asset-heavy industry. Currently, one of the deals I have come across is a great deal, except for the owners' valuation of the deals assets. According to brokers and other comparable sales, the assets are overvalued but they don't agree. How would you recommend entering a negotiation to reduce the asset value to a comparable market value?

1 like
226 views
9 comments

searcher from Harvard University - Harvard Business School

Hi Nicholas - if you are interested in potential acquisitions in the maritime industry I'd be interested to connect with you.

3 years ago | like reply | 0 likes

searcher

Asset value per se is an accounting matter. The big picture question is whether the asking price is what you're comfortable with. The seller isn't likely to change what's in their head, they will always think they know best because it is their business, and telling them they're wrong, even with iron-clad proof, isn't going to get you very far.

So if the total deal structure is top heavy, see if you can spread things out a little to make the numbers work. The seller can pretty much have whatever they want as long as you have say in the time-frame...

3 years ago | like reply | 1 like

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

Investor seeking Self-Funded Search Deals

What are market terms for Seller Notes?

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.