Hidden Value Uncovered in Recognized, Well-Managed Brand Name
Client: Manufacturer of Coffee Makers, Warming Appliances
Challenge: Brand Name Valuation Needed for Asset-Based Loan
The maker of a widely recognized brand of coffee makers and other appliances sought $30 million in financing for additional operating capital. Like many U.S. companies, its market capitalization was based on its intangible assets, primarily its brand name and opportunities to license brand-extension products. Often, however, equity investors and lenders overlook that brand value. The company asked AccuVal to appraise the company's full value so it could secure a loan.
AccuVal Approach
AccuVal launched an extensive study of the company's market share and determined that the company – thanks to its widely recognized brand – controlled substantial opportunities to sublicense the brand and collect royalties. The firm analyzed the market for the coffeemaker and determined that consumers were willing to pay more for this brand versus its competitors. One reason the brand recognition was so great was due to a marketing campaign featuring an admired former professional athlete who served as its spokesman. Although his presence elevated awareness and demand for the brand, celebrity spokespeople inherently carry certain liabilities in case they become involved in a scandal or crime. AccuVal factored that potential risk into its market assessment and intangible asset appraisal.
Bottom Line: Company Approved for Financing Based on Brand Value
AccuVal put together a comprehensive, well-documented projection of the economic benefits derived from the brand name. The lenders concurred with the valuation based on the company's brand equity and approved the financing.
The AccuVal AdVantage™
A deep knowledge of and experience in intangible asset valuation, from intellectual property to brand equity. An unparalleled understanding of assets and their worth. An ability to analyze market conditions and opportunities. A name recognized by international investors, money-center banks, venture capitalists and financial syndicators. That's The AccuVal AdVantage™ at work.
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