Valuation2019-01-30T12:53:59+00:00

VALUATION

We are the optimal solution for complex valuation and consultancy services for corporate clients.

What do we evaluate?

Valuations of companies, stocks or shares

We evaluate companies irrespective of their complexity by estimating the total value of the company, the value of the invested capital and / or the amount of equity. Most often, it’s about transferring the entire business or a majority stake or of about controlling stocks / shares.

We use the valuation market information from the most widely used databases (Infinancials, Amadeus, Reuters, Bloomberg) on the basis of sectoral and industry analyses of activity volumes, expected developments, multiple market performance indicators.

In most cases, when the customer’s need is to transfer minority stocks or shares in the case of listing or delisting of the capital market, the firm’s valuation leads to the final estimate of the value of a stock or share.

The most common uses of company valuations are to estimate the value of the net contribution in the merger and / or division, for transfers between affiliated parties, and to substantiate purchase or sale decisions.

Starting from the value of the company as a whole (estimating the value of equity), applying whether or not premiums or settlements, we analyse and estimate the value of a stock or shares.

The most commonly used purposes of stock and share valuation are listing and delisting on the capital market, related party transactions, and valuation for inclusion in the financial statements, especially where consolidated financial statements are available.

Business valuations and activation lines

When a company’s activity takes place across multiple markets, domains and industries, or across multiple business segments, situations that require only one segment or a limited number of business segments to be valued out of the total occur.

Segregation of the evaluated business from the entire business complex of an entity, with all its operational, commercial, financial, human flows, is the starting point of the valuation in this case, and is based on a complex and in-depth analysis of the entire activity of the company.

This type of valuation is used mostly in cases of acquisition of business lines between neutral or affiliated parties, joint ventures, or other types of joint venture, and when business valuation aims at impairment testing for depreciation (depreciation test for activity lines or the so-called “impairment test”).

Darian DRS covers the entire spectrum of economic activities within the valuation of the production line, tools, machinery and equipment:

  • Production and sale of electricity: drilling equipment, coal and gas power plants, micro-hydro power plants, wind and photovoltaic parks, equipment, gas and electricity transmission and distribution installations and network, fuel distribution stations;
  • Metallurgical industry: Continuous casting lines – steel, pipe mills and steel sheet;
  • Construction materials industry: cement plants, plaster, concrete plants and sorting stations;
  • Agriculture and food industry: farm equipment and lines of production, silos and grain storage, concentrated anumal feed factories, production lines in the dairy industry, slaughter and processing of meat, milling and bakery, oil and sugar production;
  • Manufacture of paper and paper products;
  • Manufacture of chemical fertilizers;
  • Machine building industry: rolling stock repair equipment;
  • Civil engineering and genius equipment and machines;

Our own pricing database, accumulated experience, and a team dedicated to machine and equipment valuation allow us to address a wide range of high complexity valuations by applying valuation techniques and methods, in line both with Romanian standards and legislation, as well as with best international practices.

Valuation reports are mostly used for transfers between affiliated parties, but also for securing loans, for recording in financial statements, as a contribution to equity, or for restructuring, insolvency and liquidation of companies.

After years in which the intangible elements were “Cinderella” from the point of view of their individual recognition both in the transactions and in the financial statements of the Romanian companies, the last period marked a return of the business environment towards the recognition and valorisation of intangible assets and intellectual property.

Access to international databases such as RoyaltyStat and RoyaltySource, as well as the experience gained in past projects, allow us to participate in valuations of intangible assets using internationally recognized estimation methodologies that allow our clients to use valuation reports both in Romania and abroad.

The most common uses of this type of valuation are the use for the allocation of the acquisition price and recognition in the financial statements as a result of the acquisition / business / enterprises combinations, but also for transactions between related parties.

Our approach is an integrative one, which takes into account the synergy of knowledge, specializations and experiences of the valuation and taxation departments.

Generic real estate or generic real estate properties evaluated by the Darian team across the country fall into the following major categories:

  • Land valuation, including farmland;
  • Commercial property valuation;
  • Office buildings valuation;
  • Industrial and agricultural properties valuation;
  • Logistic parks and storage halls valuation;
  • Hotels, restaurants and entertainment spaces valuation.

The main types of commercial properties over the years are: malls and shopping galleries, hypermarkets and supermarkets serving most of the existing networks in Romania, discount stores, car showrooms, and household product presentation store networks.

The evaluated industrial real estate properties belong to the entire spectrum of sections of the manufacturing industry, from the food industry to the metallurgical industry, passing through the car building industry, shipbuilding, textile industry or the manufacturing of fiber products, the manufacturing of cables or glass products.

In the sphere of the logistic parks or storage halls evaluated, we also include, in addition to classical ones, “big box” or DIY properties from the area of building materials or DIY.

In the 25 years of experience, the number of hotels, restaurants and treatment and entertainment are valued by the thousands, covering the whole range of hotels for business tourism, transit tourism, or relaxation and treatment tourism. Without modest modesty, we believe that you will find at least one hotel rated by Darian over time, in every resort in Romania.

Achieving a quarterly analysis of the real estate market at national level, both in the commercial and office and industrial segment, allows us to substantiate the data used in the valuation reports and to maintain a high quality and clarity of our reports.

Valuations to guarantee a loan are predominant in this valuation area, but the valuations for inclusion in the financial statements, the tax assessment and the valuation for the capital increase also follow.

  • Valuation of Power Stations, Small Hydro Power Plants, Wind Parks, Photovoltaic Parks;
  • Valuation of oil and gas assets, including offshore equipment and platforms;
  • Valuation of assets in the field of transport and distribution of utilities, including equipment and networks.

For what purposes do we evaluate?

Whenever affiliated companies transfer assets or services to each other, tax legislation requires the drafting of a transfer pricing file to demonstrate that the price at which the transfer is made is a market price.

When the object of the transfer is a company / business or part of a business (business line), an intangible asset (trademark, registered trademark, product name, license, patent, etc.), a real estate (land, real estate property, ) or a fixed asset (equipment, machinery, tools, plant, etc.), the market price of the transfer is demonstrated by a valuation report of that business, parts of the business, intangible assets, movable or immovable property.

By using market-based approaches and valuation methods similar to those required to compile transfer pricing files, using industry-recognized databases (Amadeus), we develop valuation reports that our customers use to support intra- group transfers.

Our technical knowledge and accumulated experience allow us to approach valuations for this purpose across the spectrum of industry, production, distribution, utilities, commerce, hotel industry, transport and warehouse, as well as from the sector of IT services, consulting, management services, websites.

Valuations in these cases take the form of valuation reports, professional opinions or so-called “fairness opinion” and are designed to provide support to our clients in making decisions about transactions or at the level of the negotiated price.

Depending on the position of the customer in the transaction (seller or buyer), on additional or special items occurring in the course of transactions (synergies resulting from the acquisition, instruments, conditions and periods of particular investor financing, intangible assets that are transferred or not, etc.),

The Darian team, based on a thorough analysis of the situation and through continuous and customer-focused communication, provides support for estimating market value or, as the case may be, the investment value or special values.

Understanding the problem, defining the estimated type of value from an early stage of the valuation project, focusing on deadlines and making a report meaningful for the investor, as well as communicating with investors, are key elements that characterize the way in which we understand to fulfil the assumed tasks.

Company valuations for mergers and divisions are made for the purpose of estimating the net contribution of the companies involved in the restructuring (merger or division) when the general meetings of the companies involved decide that the operations carried out during the reorganization are based on the global valuation method of the reorganized companies as specifically requested by OMF no. 897/2015.

The valuation in this case involves the valuation of the transferred business or part of the business and the estimation of the market value of the equity. In the valuation we use market information collected from the most widely used databases (Infinancials, Amadeus, Reuters, Bloomberg, etc.) on the basis of sectoral and industry analyses on activity volumes, expected evolutions, performance indicators, multiples market.

We cover the entire territory of the country and the whole spectrum of possible areas, ranging from agriculture to niche services, passing through the production, industry, construction, transport and trade areas.

Valuation in the restructuring projects involves the valuation of certain assets or lines of activity to be transferred / sold. These are both unused or unusable assets, as well as functional and performing business and assets.

On a case-by-case basis, the understanding of the problem and the analysis of the object of the valuation allow us to find the most accurate solutions, both related to the estimated type of valuation and to applied approaches, whether it is valuations of assets (immovable or movable assets) or business valuations.

Territorial coverage and long-term asset valuation allow us to simultaneously carry out projects evaluating a significant number of assets across Romania, many of which were valued at least once in the past by Darian members over 25 years of activity.

When a company is in one of the situations of preventing insolvency, reorganization or bankruptcy, it is necessary to draw up valuation reports on the company’s patrimony, covering all assets and liabilities individually. Often the requirements are to separately present the values of the guaranteed assets in favour of the different creditors of that company.

Also, in the run-up to the reorganization plan drafting, there are situations in which business valuation is required in the case of excessive indebtedness, in order to be able to compare the estimated level of the amounts recovered through the liquidation of the property with the possible value to recover from the capitalization of the debtless business.

The various situations where a valuation report is required are governed by Law no. 85/2014. Among these we mention:

  • the private investor test conducted in insolvency or reorganization prevention proceedings;
  • asset capitalization within the reorganization or bankruptcy procedure;
  • valuation of the assets before submitting the final list of claims;
  • valuation of assets in the liquidation procedure in case of bankruptcy (block and individual valuation).

The advantage of Darian in this case is both the experience gained over time in this type of cases, as well as the size of the team and the territorial coverage.

the Romanian economy’s evolution from state economy to a market economy also implied the mass privatization stage of the 1990s, which led to the listing of a significant number of companies on the capital market, both on the main market (BVB) and on the alternative platform (Rasdaq).

As a result of this, over time, based on the provisions of the Capital Market Law no. 297/2004, an equally significant number of companies later decided to delist from the stock exchange.

The events culminated with mass delisting on the Rasdaq market as a result of the provisions of Law no. 151/2015.

The experience of over 20 years in enterprise valuation has allowed Darian to accumulate a vast portfolio in this type of case, which requires, besides thorough knowledge of the techniques related to enterprise valuation, knowledge related to the Capital Market Law. Most likely, the number of rated companies that delisted from the capital market exceeded 100 over time.

In the opposite direction, listing on the Romanian capital market has been and remains a shy exercise, rather made by the state to privatize companies in which it owns holdings. Although listed in a limited number, most of the traded companies were evaluated by Darian upon listing, be it the Proprietatea Fund, Transgaz or Electrica.

Darian is registered in the Register of Independent Valuers / Experts of the Financial Supervisory Authority (ASF) under the number PJR16EVPJ / 120011, with certification no. 281 of 17.04.2006.

The valuation for registration in the financial statements (balance sheet) and / or for accounting consolidation is required by the national (OMF no. 1802/2014) or international (IFRS) accounting regulations.

Estimating the fair value required by these regulations is a complex process that involves knowledge of both valuation standards and accounting standards (national or international).

This joins the complexity of the combination of assets that most of the times have to be assessed: land, buildings, special constructions, machinery, equipment, installations; all of which form a functional asset or with an interrupted activity.

The benefit of being able to assign to each project an interdisciplinary team with experience from various areas of valuation (machines and equipment, business valuation, real estate valuation) and financial-accounting experience allows us to address the most outstanding cases such as valuation in the field of metallurgy, of utility distribution or energy generation. After the acquisition of a company or business line, we offer advice to the investor on the allocation of the acquisition cost for business component assets (PPAs).

The in-kind contribution to the share capital of commercial companies is regulated by Law no. 31/1990, regardless if we refer to the in-kind contribution to the incorporation of the company or to the increase of the share capital.

Situations may be diverse and in-kind contributions also: from land, real estate or equipment to stocks/ shares or intangible assets.

Over time, by the development of a team specializing in the entire range of valuations of assets, whether these are businesses or intangible assets, real estate or movable assets, we have managed to fully cover the spectrum of situations demanded by our customers, the quality of the valuation reports being proven by the full success of operations in which we provided support in assessing contributions.

With the amendment of the Tax Code in early 2016, the buildings taxation was also changed, depending on their purpose: residential, mixed or non-residential. The new assessment methodology, transposed into a new valuation guide (GEV 500), has been appropriated and deepened by the Darian team, which has once again been in the first line of application of the novelties in the field.

The experience and technical knowledge in the valuation, together with the creativity and experience of building and using software tools to help in the accuracy and speed of the valuation process, have allowed us to build advanced tools in a very short time technologically speaking, with which we can approach several projects in which, between four and five thousand buildings were evaluated simultaneously in a single project for the same client, and hundreds of reports were eventually produced and then handed over to the local Councils.

The standard operational flow, accompanied by rigorous documentation drafted by a well-disciplined and well-trained team, allow us to meet the challenges of this start in the valuation for the establishment of the building taxes valueValuation for loan guarantees.

In the Romanian economy over 90% of financing is made by credit. Because of that there is a permanent need of evaluating the guarantees that our clients make available to financiers. Whenever necessary we offer support to our clients in valuating the assets that they want to use as guarantees, whether in terms of real estate, movable assets or even share or equity interests.

The independent position of the valuator towards his/her client, as well as towards the beneficiary of the valuation report (financing bank), is one of the most important work principles in this context. We are proud to say, that over time we managed to keep a clear independent valuator image and at the same time to be appreciated, and our reports to be accepted by most Romanian banking institutions, as well as by various European financial institutions.

Due to the territorial representation and the flexibility of the Darian team, we reply to our clients’ request throughout the country, on the entire spectrum of assets valuation, thanks to the balanced diversification of our own experts’ specialization from all of the areas of the country.

Over time we used the newest trends and direction in the valuation of loan guarantees, being one of the few Romanian consultancy companies that apply, since 2010, statistics evaluation instruments of the guarantees’ portfolios of commercial banks.

We verify all categories of valuation reports, for any type of properties, movable goods, business or intangible assets.

We verify valuation reports at the requests of auditors.

We also verify reports involved in commercial disputes, being able to be consultants for both parties involved in the dispute.

The valuation of guarantees’ portfolios is made by specific techniques (global valuation involving statistical methods, individual valuation by office valuation and even audit), applied individually or at the same time – in different proportions for each valuated portfolio.

We are one of the first the few valuation companies that apply, since 2010, statistics methods in the valuation of guarantees’ portfolios.

We evaluate properties’ portfolios during the granting of credits, in order to offer support to banks in compliance with the NBR requests regarding the revaluation of owed guarantees portfolios. When buying bad credit portfolios, our services of portfolio valuation are successfully used by consortiums that invest in these portfolios.

Contact persons

Adrian Popa-Bochis
Adrian Popa-BochisSenior Partner, COO
Adrian is a Senior Partner and Operational Director at Darian. He has 17 years of experience in the field of consulting and joined Darian team in 2001.
Horia Ovidiu Abrudan
Horia Ovidiu AbrudanPartner
Horia coordinates and develops the business development department of the Group. He also manages the national client portfolio and the integrated service offerings.
Mircea V. Ignat
Mircea V. IgnatRegional Manager Transilvania, Business Development
Mircea manages the client portfolio from Transylvania, being also in charge of business development and coordinating related marketing activities.