Monday, June 20, 2011

GoIndustry DoveBid goes for a Medical

The GoIndustry DoveBid UK valuation team carried out an interesting valuation in March.  One of our major corporate clients required a balance sheet valuation of a 2008 clinical imaging facility with a major UK hospital.    The facility uses the latest technologies in magnetic resonance imaging (MRI) and positron emission tomography (PET). Research focuses on cancer, stroke, neurological and psychiatric diseases.  The facility is GxP compliant for scanning of the spread and distribution of cancers and tumours.

The assets include:

  • 2 Siemens Cyclotron particle accelerators and a Nuclide delivery system;
  •  Hot cells, laboratories and laboratory equipment for the scale production of research drugs;
  • 2 Siemens PET scanners, 2 Siemens MRI scanners, Siemens Invivo scanner and a range of screening and other laboratory and ward assets for the scanning of drug test volunteers;
There were a number of future decontamination issues; the 2 Siemens Cyclotron particle accelerators and the Nuclide delivery system produce a level of radiation in use which contaminates both the machinery and the equipment.  There is also the liability for the eventual decontamination and removal of the assets at the end of their life.

The facility operates under the Radioactive Substances Act (RSA93); under which the operator is required to produce a Decommission Plan for the cyclotron suites and that plan is updated at 5 yearly intervals.  This was one of the first requirements of the sort in the UK in the non-nuclear sector and the first  plan was a prototype report and full of assumptions.  After consultation, we calculated the cost of decommissioning at a significant cost, just less than £1million.

All in all, a complex job with some fascinating assets and an interesting outcome.

For more information on the services GoIndustry DoveBid please see http://www.go-dove.com/

Sampling ”Uisge Beatha” (The water of life)

The GoIndustry DoveBid Valuations Team recently went north of the Border into the Scottish Highlands to sample some of the local “Water of Life”. Unfortunately the sampling was restricted to the completion of our inventory appraisals rather than the quality of the spirit held by both the whisky distillery and the independent bottler of single malt whiskies whose inventories we were appraising.

Given the bespoke nature of the inventory and the specialist market in which the client’s company operated, the commencement of our site work involved several pre-visit conference calls with the lenders credit staff and the involvement of an Independent Whisky Industry Expert whom we engaged as a Consultant to provide additional depth to our analytical work.

The independent bottling division was looking to raise working capital to facilitate the further acquisition of maturing whisky casks with the purchase to be completed by mid December. Working to very tight timescales the Valuations Team completed three separate and much bespoke inventory reports for the lender. The depth of detail within the reports which included both a going concern and a brokerage valuation ensured the deal was sanctioned within the required timescales to facilitate the completion of the cask purchase.

For further information on our experience in this sector please contact us at www.go-dove.com/valuations.

Thursday, June 2, 2011

Fashionable Food

GoIndustry DoveBid recently competed the valuation and sale of a producer of cooked, smoked and cured meats for a major UK insolvency practitioner.

GoIndustry DoveBid carried out a desktop appraisal in mid 2010, details of which were included in the proposal for a Company Voluntary Arrangement at the time. The cooked meats producer had supplied major retailers, food service outlets and public bodies. The loss of key contracts in a fiercely competitive market with continual downward pressure on price from buyers, had meant that there was not enough business to fill the 125 tonne per week capacity of the plant in Milton Keynes, Buckinghamshire, UK. Eventually, the company was not able to cover overheads, despite its agreement with creditors.

The directors and insolvency practitioners, then acting as supervisors to the CVA, asked GoIndustry DoveBid to attend on site in January 2011 to review the 2010 desktop appraisal and to submit a formal valuation report. Simultaneously, the company was offered for sale by the directors, insolvency practitioners and GoIndustry DoveBid in a combined marketing campaign.

Despite numerous enquiries, no party stepped forward to make an initial offer and the administrators were appointed in February. GoIndustry DoveBid was asked to realise the plant and machinery assets and an online auction sale closed in March 2011.

Assets for sale included meat grinders, tumblers, injectors, tenderisers, sausage machinery, smoking, steaming and roasting ovens, slicers and thermoforming packging machines as well as a wide range of ancillary service and factory equipment.

85 parties registered for the sale from 13 different countries, including Peru, Venezuela, Ecuador, India and Malaysia as well as a number of European countries including the UK and Ireland. More than 2,700 bids were received from 72 of those registered.

The sale achieved slightly higher than hoped for. More than three fifths of the gross assets sales came from Ireland, which demonstrates that ther is clearly still cash in the Irish economy, and let’s face it, whilst other sectors may be suffering, food never goes out of fashion.

For more information on the services offered by GoIndustry DoveBid please see our website http://www.go-dove.com/

Thursday, May 19, 2011

Tangible Assets

In Q2 2011, the GoIndustry DoveBid Valuations Team appraised the value of tangible assets for accounting purposes at over 1,100 various public buildings throughout the United Kingdom, primarily back office and front-of-house facilities.

Using a sampling methodology, the GoIndustry DoveBid team of seven valuation specialists visited 81 locations over a five week period. Over 130,000 individual items were inspected, categorised and graded according to condition.

Data provided by the Company was compared with our findings to benchmark it’s accuracy and a range of data points for each site were analysed to identify patterns of asset utility, lifecycle and economic life, current cost and future value, according to the data available,  with the unvisited sites being categorised accordingly.

Following a final review of the assets and the appropriate accounting standard, FRS15, we used the most appropriate methodology for arriving at the Value of the Plant & Equipment to the Business of the asset portfolio. We reported an overall value in excess of £60m.

For more information of the services offered by GoIndustry DoveBid see our website go-dove.com

Monday, May 9, 2011

A Middle Eastern Production

GoIndustry DoveBid were commissioned to produce a valuation of a major Middle East based production studio and television channel on the basis of Fair Market Value – Installed to enable to the client to assess an offer to purchase the company assets.

The facility included multiple television studios, offices, outside broadcast and satellite vehicles.  The assets were all current technology and from tier 1 manufacturers, and included cameras & lenses; lighting; video & audio editing and post production; graphics; ingest and playout; routing, switching and distribution; transmission; archiving; outside broadcast.

Although there is a ready market in the Middle East, there is limited evidence of sales of similar facilities on the open market - the cost approach was therefore used to value the facility, with adjustments for changes in the costs of the assets and removal of any costs irrelevant to the value (e.g. training, expired software licenses and support contracts).

The valuation was completed on time and to the satisfaction of the client – we were also able to complete additional work requested by the client at short notice in order to facilitate the sales process.

For further information on the services offered by GoIndustry DoveBid

Friday, May 6, 2011

Global Semiconductor.

The GoIndustry DoveBid valuation team recently produced a review of the global Semiconductor market for a major European bank.  The review contained the following sections:

-       Introduction 
-       Technology
o   Recent History and Outlook
o   Future Technology
o   Impact on Equipment Pricing
-       New Equipment Market
o   Current Market and Recent History
o   Equipment Purchasing & Global Trends
o   Market Outlook
-       Production Tools
o   Process
o   Equipment Types
o   Major Manufacturers
-       Used Equipment Market
o   Current Market and Recent History
o   Used Equipment Buyers
o   Routes to Market
o   Used Equipment Types & Pricing
o   Market Outlook
-       Summary

Topics covered in the report include wafer size (200mm, 300mm and 450mm or 8”, 12” and 18”) and process nodes (90nm to 11nm), geographic coverage and development, existing and new wafer fabs, tool costing and future technological developments.

This comprehensive report totals 6,500 words (excluding terms and appendices), for further details or to purchase a copy of the report please contact Matt Earl matt.earl@go-dove.com or Neil Smith neil.smith@go-dove.com.

For more information on this and other services offered by GoIndustry DoveBid please see our website http://www.go-dove.com/

Friday, March 11, 2011

Inventory Valuations Get Sticky

The GoIndustry Dovebid Valuations Team was recently engaged by an Asset Based Lender (ABL) to reappraise a manufacturer of self adhesive tapes.  Following a successful MBO supported by an ABL facility, the lender required an inventory reappraisal in order to assess the performance post buy-out.

The company manufacture as well as buy in adhesive tapes in various forms, with inventory on hand comprising of raw materials, work in progress and finished goods.  The work in progress is mainly produced to order and therefore in its own right would generate a relatively high value in an exit scenario. Raw materials together with the factored finished goods were reviewed for ROT, resulting in raw materials being eliminated and an element of finished goods due to the easily identifiable nature of the goods.

Raw Material price pressures had resulted in margins lowering, however with inventory turn improving our overall reported NOLV % was broadly similar to our prior appraisal resulting in the lender maintaining the facility at the same level. The appraisal involved two valuers visiting the company over one site day with site work included a test count, three different cost tests, retention of title and slow moving analysis and an exit cost calculation amongst other tests.

For more information on GoIndustry DoveBid inventory appraisals then please contact the GoIndustry DoveBid Valuations Team.

Wednesday, March 2, 2011

Locomotive Manufacturer

The GoIndustry DoveBid Valuations team was awarded an assignment to appraise the assets of a large locomotive manufacturer.  The company is one of the largest North American privately held global providers of new and remanufactured locomotives, locomotive products and wheel services. This represents the first time the company was to use an asset based lending (ABL) financial structure.  Additionally, the client had a very tight time frame.  The Go-Dove team provided multiple values on approximately $150 million of assets encompassing 9 facilities containing over 275 acres in more than 1.3 million square feet under roof. 

 
About the Rail Industry: 

 
The US railroad equipment manufacturing industry includes about 175 companies with combined annual revenue of about $13 billion. The railroad equipment ("rolling stock") industry is highly concentrated: the 20 largest companies account for nearly 90 percent of revenue.  The economic downturn over the past couple of years has impacted many companies in the rail industry.  However, it appears the rail industry is near rolling to better days:

  • Modern 6 axle road locomotives have been pushed hard during the recession and are showing signs of accelerated need for overhauls.
  • Older Core locomotives have been stored or have had deferred maintenance to keep operating costs down. (Pay me now or pay me later). We are now at the pay me later. 
  • Shortline Rail customers are back in the market.  These customers that were short of good dependable power before the recession are coming back into the market for locomotives.
  • Deferred maintenance by all of the railroads is causing an increase in demand for replacement parts and services.  Since a big part of the market place is shortline railroads, qualified or running takeout parts at a fair price will see increasing demand.
  • In May of 2010 rail traffic was increasing enough to start pulling both cars and locomotives out of storage. Railroad system velocities have remained relatively high and terminal dwell times have remained relatively low during the increase in traffic without the difficulties normally experienced in the past. It appears that both the slow recovery from the recession and the positive effects of the massive railroad CAP X programs are paying off for the railroads.
 

This is another prime example of how GoIndustry DoveBid has exercised its asset intelligence to assist others in making key strategic decisions for finance purposes.

 

Friday, February 25, 2011

On behalf of a syndicate of lenders...

On behalf of a syndicate of lenders GoIndustry DoveBid was recently asked to value a large fleet of construction equipment, located in the Middle East.        The scope of the valuation was to inspect a sample of the assets, collect detail on the condition of these units, to provide current market values for both a solvent and insolvent 12 month exit scenario and finally,  to provide future values over the next 4 years. 

We inspected the equipment at 5 different sites, and using a using a pre-defined inspection form to gather our evidence we scored factors such as tyre condition general condition of equipment and we collected information on hours and attachment.  During our time on site we observed over 27% of the total fleet.

The funded portion of the fleet was all from a single manufacturer and under 5 years old.  The majority of the market evidence available to us referred to equipment in the region of 10-15 years old, and any comparable ages of equipment did not correspond to a traditional depreciation profile based on the age alone.  Therefore, using adjusted logarithmic trend lines from the market evidence, we produced depreciation profiles based on unit hours rather than age

We also estimated the hours on none inspected units using the company’s latest recorded hours, then we increased these by the average observed difference per model type.  Future hours were calculated assuming a reducing hourly use per year.  The tyre condition of none inspected items was also estimated and based on observed models and factored into the values as either uplift or write down based on the variation from the mean tyre condition.  We also took account of tyre brand tier, fleet size, general condition and the local market.  Depreciation profiles were produced for each model, and market evidence profiles were provided for the major models in the fleet.

The in depth analysis provided detailed information of the fleet both for the current values and based on realistic future conditions that took into account the relevant variables to value the none observed portion of the fleet.

For more information on services which GoIndustry DoveBid can offer please go to our website, http://www.go-dove.com/.

Wednesday, February 16, 2011

Metal, Metal Everywhere

GoIndustry Dovebid was recently engaged by an Asset Based Lender (ABL) to reappraise a large independent metal stockholder.   Following a successful implementation of an inventory facility back in 2009, the lender required a reappraisal given the fluctuations seen of late within the metal market prices.

The company operated out of 12 regional centres located throughout the UK, which together with circa £12m of inventory and over 44,000 sku’s, the level of analysis was considerable. 

Retention of Title was a key area of focus, complicated further by a well spread supplier base.  50 suppliers terms and conditions of sale were reviewed and appropriate reserves applied in order to assess and quantify the ROT reserve. 

The Company performed well since our last visit given great pressures economically seen within the UK over the last couple of years.  Our valuation was broadly in line with our prior visit, albeit slightly lower, reported within agreed timescales and employed 3 valuation team members.

For more information on the work which GoIndustry DoveBid completes please go to our website http://www.go-dove.com/

Monday, January 17, 2011

GoIndustry DoveBid and the Great Outdoors

The GoIndustry DoveBid Valuations Team donned their outdoor gear recently and embarked on a new adventure - an inventory appraisal of a company specialising in the design, importation and distribution of branded camping and outdoor adventure equipment.
The full inventory appraisal followed the completion of a desktop inventory study in September. This was in response to an enquiry from the prospective lender as to the level of funding availability that could be generated from a stock finance facility. The company had enjoyed several consecutive years of increased sales growth, following the resurgent interest in camping and outdoor activities and the result of the ongoing expansion required urgent additional working capital.

The Valuations Team established base camp at the company’s head office and planned outings to both of their distribution centres. Within the space of five days, the team had fully evaluated the inventory and submitted to the lender a detailed inventory report which included exit scenarios based on both peak and low season stock holdings.
The lender was able to sanction a stock finance facility with the company’s £10m of inventory forming the loan collateral to provide the additional working capital needed. The stock finance facility was to operate alongside the invoice finance facility and would replace the trade finance facility, historically used to fund letter of credit based inventory purchases.

For more information contact go to our web page at GoIndustry DoveBid.

Accurate valuations picture for photo imaging

GoIndustry DoveBid Valuation Services was recently engaged by an Asset Based Lender (ABL) to appraise a manufacturer of monochrome photo imaging products. The ABL had an existing facility in place but required a re-appraisal to be carried out, as the market in which the company operates is in a general decline.
The inventory being appraised was in the form of raw materials, work in progress and finished goods, the majority of which contained traces of Silver.
Appraising the company gave rise to many challenges. Firstly, by the very nature of the product being sensitive to light, a simple test count threw up the first challenge. It is not every day that a test count is carried out in virtual darkness!
The second and most important challenge was putting value to the work in progress. It can be difficult to appraise WIP, as it's not normally clear how long it would take to convert, what the end product would be and at what price.

As a result, WIP tends to be overlooked by the majority of ABL inventory lends. However, in this case, the costs and processes involved to convert the WIP was generally low and achievable within the proposed 90 day exit. Due to the Silver content, consideration was also made to materials that were deemed slow moving or obsolete. The Silver content was quantified from the excluded inventory and added back into the overall NOLV. Finally, although raw materials were not part of the existing facility, a review was carried out with value being achieved post the review of retention of title.
Our valuation, excluding value attributed to raw materials was broadly in line with the prior appraisal. However, placing value on the raw materials, the company is hopeful that following the GoIndustry DoveBid appraisal, terms currently being offered by the ABL may be improved.

For more information on the services offered by GoIndustry DoveBid please visit our web page at Go-dove.com

Valuation of specialised metal forming equipment

GoIndustry DoveBid has successfully completed another valuation of specialised metal forming equipment for a supplier to many of the world’s leading aerospace companies.

The asset valuation was commissioned by a private investment company which has recently supported the acquisition of the manufacturing business. The asset appraisal was completed accurately and within the prescribed deadline. The rapid deployment and expert knowledge of asset valuation professionals from both GoIndustry DoveBid’s Leeds and London offices ensured a rapid turnaround to meet the client's requirements.

The assets included aluminium forming joggling presses, hot and cold presses, laser cutting cells, vertical machining centres and associated tool room equipment.
The speed and accuracy of the valuation enabled the client to make pivotal decisions based around both the machinery and equipment valuation. This is another prime example of how GoIndustry DoveBid has exercised its asset intelligence to assist others in making key strategic decisions.

For more information on our valuation services please visit GoIndustry DoveBid.