www.CoachingAssembly.com
For additional materials to on www.CoachingAssembly.com
Sum of the Parts (“SOTP�) Click to edit Master title style
CoachingAssembly. All rights reserved.
Any unauthorised copying, duplication, reproduction, reselling, distribution or other commercial use will constitute an infringement of copyright
Sum-of-the-parts analysis (SOTP) The SOTP methodology values a company by applying different valuation techniques to its separate units
This methodology is used to value holding companies or conglomerates £m
Method.
Multiple
Reference
% held
Equity Value
Sub 1
Market value.
n.a.
1,500
75%
1,125
Sub 2
Market value.
n.a.
600
60%
360
Sub 3
EV/EBITDA – Net Debt
8.0x
70
100%
560
Sub 4
P/E
10.0x
100
80%
800
Listed Subs
Private Subs
Operating Units Corporate Overheads Net Debt
2,845 EV/EBITDA
6.0X
(30)
(180)
P / BV
1.0X
(300)
(300)
Total CoachingAssembly. All rights reserved. Any unauthorised copying, duplication, reproduction, re-selling, distribution or other commercial use will constitute an infringement of copyright
2,365 2
Sum-of-the-parts analysis (SOTP) – Cont’d 800
2,845
(180) (300)
2,365
560
360 1,125
Sub 1
Sub 2
Sub 3
Sub 4
CoachingAssembly. All rights reserved. Any unauthorised copying, duplication, reproduction, re-selling, distribution or other commercial use will constitute an infringement of copyright
Operating Units
Corporate Overheads
Net Debt
Total 3