Dates
 
12 February 2009
16 July 2009

 Course Overview

This course ideal for those who are dealing with technology companies and need to gain an appreciation of their worth.  It focuses on the different techniques that can be deployed in assessing these companies, especially the real options approach which has achieved a wide degree of popularity. The course is also useful to those who are involved in any type of corporate transaction for technology companies from an advisory perspective. Participants should be familiar with discounted cashflow techniques and have at least a basic understanding of business valuations.

Participants will be required to bring a laptop with a CD-Rom or USB connection to the course.

 Course Content

 Defining the Problems
Differences between traditional corporate valuation and technology valuation
Handling data problems that emerge with technology companies
Lifecycles and corporate cashflows
Review of DCF valuation techniques and applications to technology businesses
Valuing early stage development businesses

Applying the DCF Model to Technology Companies
Estimating cashflows and expenditure patterns
Evaluating the expected growth rate
Links to corporate strategic models
Combining growth rate with investment intensity and return on investment
Applying the appropriate discount rate and varying the rate over time
Evaluating the stable growth stage and calculating the terminal value
Inherent problems of using the DCF model to value technology companies

Using Multiples in Technology Valuation
Importance of using EBITDA if possible
Using revenue multiples
Examining the broad range of possible comparisons
Using statistical analysis to improve the multiple comparison
Pitfalls in using multiple approach for technology companies

Using the Real Options Approach
The problems inherent in using the NPV/DCF approach to valuation
Defining real options – patent rights, expansion option, abandonment option
Why real options are more applicable to technology companies
Basics of real option valuation using binomial trees and a lattice approach
Financial option pricing (Black Scholes) and the link to real options
Management options and the value of strategic flexibility
Using real options approach to improve the understanding of technology
   valuations

 

Times	Cost	Law Society CPD Hours
09.30 - 17.00	£750.00 +VAT (£881.25)	6