Recognizing Permit's Worth Boosts Company's Value Five-Fold
Client: Environmental Services Company
Challenge: Chemical Recycling Company Purchasing Property as Chemical Depot Cross Dock; Selling Price Far Exceeded Property's Market Value as Standard Warehouse
An environmental services company in the Northeast sought $8 million to refinance a property to be used as a chemical cross dock. The company provided a broad range of services to state and federal government agencies as well as to private industry – from conducting environmental impact studies to collecting and disposing of surplus chemicals to managing Superfund sites with hazardous wastes. The company had previously engaged AccuVal because of its experience in the chemical industry.
AccuVal Approach
The company was housed in a massive, plain-box industrial building where large drums of chemicals and other containers of waste material are stored before they are aggregated and transferred to a remediation site for disposal or transformation for reuse. AccuVal knew that if its appraisal were limited to the value of the real estate and equipment alone, it would only represent about $2 million – not enough to secure financing. To find additional value, AccuVal conducted a market study of other waste storage companies in the area. The firm discovered that the client was the only company in the region with a special government permit to manage toxic chemicals near a major city; in fact, competing companies sometimes had to rent space from the client. AccuVal's research also showed that similar permits were no longer available in that market, and the permit would be transferable to a third party if the business were sold. When AccuVal calculated the value of that unique operating permit, along with the traditional value of the plant operations and its plant and equipment, the combined assets totaled $10 million, or five times greater than the value of the real estate if considered as a traditional warehouse.
Bottom Line: Company's $10 Million Value Proven; Loan Quickly Approved
AccuVal developed documentation that convinced the lender that the $10 million value could be realized if the business changed hands. The firm demonstrated that no other competitor could get such a permit in that market. The lenders agreed and approved the $8 million loan refinancing.
The AccuVal AdVantage™
Recognized expertise in the chemical industry. The ability to look at a plain-box plant and think outside that box to find true value. The skill to adapt to unusual business situations and find innovative solutions. A reputation recognized globally by investors, money-center banks, venture capitalists and financial syndicators. That's The AccuVal AdVantage™ at work.
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