CASE STUDY: Investment Banking
Maximizing Time, Adding Value
The Yale Group Helps Companies Plan, Raise Capital, Issue Debt and Prepare for Sale—All Areas Where Valuation is Crucial
Rob Gettinger
Rob Gettinger, senior investment banker at the Yale Group, has built a significant part of his practice by offering valuation services to clients.
Based in Denver, the Yale Group specializes in raising debt and equity for a wide range of mid-market companies, generally ranging in value from $5 million to $100 million.
Yale Group clients come from such diverse industries as manufacturing, financial services, media, oil and gas, and even government municipalities.
Rob's specialty is technology and media companies.
He says that there are three common situations where he's called upon to determine valuations for clients.
"The first is when we offer valuation as an ala carte service," he explains.
"There are a number of companies out there considering a sale or just planning for the future that need a professional opinion on what their company is worth."
Rob is also frequently called to serve as an expert witness in court cases.
"When a deal goes bad, people want to find out why," he says.
Perhaps surprisingly, failed deals aren't the only sort that wind up in court.
"Even if a deal goes well," Rob notes, "there are often people who feel that they weren't treated fairly, and didn't get their fair share of compensation."
The third case where Rob is called upon to determine a business valuation, and the most common, is when he's helping a client go out and get money or sell a company.
"When we're doing a private placement, we need to establish a value for a company with a strong set of data to back that valuation up."
Putting a valuation in place in these cases is a bit different than establishing value for litigation: "We issue a pro-forma disclaimer, because we obviously have a vested interest in our client," Rob notes.
"But you need to stake out some territory in the valuation discussion; and when you can bring to the table a 30-page document with 20 comparables, that helps establish a line in the sand, and puts us in a strong position—it helps legitimize the price we're asking."
The ValuSource Connection
On why ValuSource
enhances its business
valuation services:
Comprehensive: "ValuSource gives me dozens of comparable valuations for virtually any company in any market."
Efficient: "By intelligently finding and running the right numbers for me, ValuSource lets us focus on where we can really add value."
Fast: "Often I can get a valuation done in 20-30 hours, when it might otherwise take days."
— Rob Gettinger, senior investment banker, The Yale Group, Inc.
To establish business valuations, Rob relies on market research, public databases, discussions with industry experts—and ValuSource business valuation software.
"ValuSource gathers information on current business valuations in every market in every region," Rob enthuses.
"The software automates the number-crunching for any of a number of different valuation approaches, but just as importantly, ValuSource intelligently generates written reports that back up a valuation rationale."
Rob came upon ValuSource years ago when he met the company's president in San Diego.
The Yale Group and ValuSource quickly discovered synergy for the sort of work the Yale Group does with the services and data that ValuSource could provide.
"At the time," Rob says, "You could get data about public companies from sources such as Capital IQ and Venture Source—if you were willing to pay $20,000 a year for it, and were primarily researching public companies."
Still, Rob notes, you had to format that data yourself, and navigate between database sources, your own custom-built spreadsheet formulations, and heavy research reports.
"ValuSource offered something new to the Yale Group, and all at a very fair price: Lots of data on closely held private companies, automated valuation methodologies, intelligently generated report writing that backs up valuation assessments."
Unless you're running one of the largest investment banking houses, Rob notes, it doesn't make sense to spend the time and money required for expensive custom programming to create valuation assessments.
"You end up recreating the wheel, and trying to build something that ValuSource already does quite well."
His hunch is that too many other investment houses are using older and more time-consuming methods.
But that doesn’t bother him.
"Part of what sets the Yale Group apart is our ability to know where we add value, and to focus our time and energy on that.
ValuSource has offered us a tremendous set of tools that allow us to spend most of our time doing what we do best."
About ValuSource Software
Recognized as the leader in the valuation software industry for more than 20 years, ValuSource develops a full line of products, including programs, databases, and report writers, that are designed to easily import and export data from Microsoft Excel and Word.
The Medical Group Management Association (MGMA) has partnered with ValuSource to offer medical practice data—such as cost surveys, compensation surveys, and coding profiles—to both healthcare and valuation professionals.
MEDIA CONTACT:
Dave Dix
512-761-4780
ddix@valusource.com