Challenge
A leading specialty chemicals manufacturing company engaged VRC to determine the value of the tangible assets of a large multilocation chemical processing company, widely known for the production of agricultural and industrial nitrogen products, for potential acquisition purposes. The valuation would provide a supportable basis of value for financing requirements. The values requested included fair market value-in-use, orderly liquidation value-in-use and orderly liquidation value. The challenge for VRC was to arrive at each of the values utilizing limited detailed and historical fixed asset records and finding adequate chemical industry market sales information. Solution
VRC’s professional staff was assigned the task of conducting a detailed inspection of the subject chemical processing facilities to identify and confirm the existence and condition of the tangible assets. Next, extensive discussions were held with the on-site plant managers and engineering personnel who were instrumental in the planning and development of the existing operations. VRC was able to identify adequate market sales information and replacement cost new data of comparable chemical facilities that were used in developing a valuation model for the subject company. Finally, by correlating the gathered information, VRC was able to ensure that all tangible assets for the potential acquisition had been included and properly valued so as to provide the client with the appropriate basis for determining the potential acquisition.
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