A leading manufacturer of branded food products engaged VRC to estimate the fair value of certain intangible assets acquired in a business combination. The acquired company was a leading manufacturer and distributor of salty snacks and the acquired brands were iconic in their region.
VRC, in cooperation with management, applied sophisticated valuation techniques to isolate the value of the brands from other intangible assets including goodwill. The brands were found to have an indefinite life and a significant portion of the purchase price was ascribed to them. Also meeting the contractual separability criteria were customers relationships, which, due to their nature, were ascribed limited value. Customer relationships were valued using a distributor method. The remainder of the purchase price was attributed to goodwill.