Prepared for TechSolutions Ltd
Report Date: 20 November 2025 · Market Data: launch-8
Positioning Statement: This valuation is indicative and designed for strategic planning purposes. It is not a substitute for transaction-level due diligence or a fairness opinion.
Based on analysis of TechSolutions Ltd, a technology services business with £2,400,000 in last full year revenue and £540,400 weighted maintainable EBITDA, the indicative equity value is estimated at £3,023,000 on a cash-free, debt-free basis.
The primary method is Capitalised Adjusted Earnings: weighted maintainable EBITDA of £540,400 is capitalised at an applied multiple of 6.15x — a sector base multiple of 5.2x adjusted by +0.95x for revenue quality, customer diversification, retention, and management factors. As an Advanced-mode cross-check, a DCF using the year-by-year growth table produces an equity value of £4,068,000, giving a triangulated midpoint of £3,546,000.
Qualitative Multiple Adjustment: The scored factors (VAL-060, VAL-062 to VAL-065, plus the VAL-081 revenue mix in place of VAL-061) added a net +0.95x to the base multiple.
A high effective recurring share of 80% (+0.5x), diversified customers (+0.25x), strong retention (+0.2x), experienced management (+0.15x), and lawyer-reviewed contracts (+0.1x) outweighed a −0.25x deduction for moderate key person dependency. Adjustments are capped at ±40% of the base multiple (±2.08x here — not reached).
Adjustments to reported EBITDA to reflect sustainable, ongoing operational earnings:
The recurring adjustment of £30,000 is applied to every historical year: previous year becomes £498,000 and two years prior becomes £380,000.
Maintainable EBITDA is a weighted average of adjusted historical years, weighted towards the most recent performance:
No year-to-date figures were provided, so the standard 50/30/20 weighting applies. When at least 6 months of YTD figures are supplied, an annualised YTD year is weighted at 40%.
Revenue quality is scored once, on a single scale: because the revenue mix (VAL-081) is completed and valid, it is used in place of the recurring revenue band (VAL-061). The owner-ratio check (VAL-089 / VAL-090) only deducts when a business has 5 or fewer employees per working owner.
Working Capital Context: Computed working capital (debtors + inventory − creditors) is £250,000, or 10.42% of revenue, against a typical ~5% for the sector. Narrative context only — no equity adjustment is made in v1 of the methodology.
Important Tax Notice
The equity value of £3,023,000 shown above is the pre-tax value. Actual net proceeds will be subject to Capital Gains Tax (CGT) and potentially other taxes depending on ownership structure and available reliefs (e.g., Business Asset Disposal Relief). Seek specialist tax and legal advice before any transaction.
The range width is set by the reliability of the underlying figures (VAL-073). Accountant-prepared accounts carry a ±15% band — audited accounts would narrow this to ±10%; best estimates would widen it to ±30%.
Note: The DCF is produced in Advanced mode when a year-by-year growth table (VAL-083) is supplied. It cross-checks the primary Capitalised Adjusted Earnings result — it does not replace it.
Risk-free 4.9% + beta 1.05 × market risk premium 5.5% + size premium 6% + CSRP -2pp. A negative premium lowers the rate and raises the DCF value. Growth assumptions are unaffected.
| Year | Growth | Revenue | Adj. EBITDA | FCF | PV of FCF |
|---|---|---|---|---|---|
| 1 | 18% | £2,832,000 | £638,000 | £401,000 | £350,000 |
| 2 | 15% | £3,257,000 | £733,000 | £469,000 | £357,000 |
| 3 | 12% | £3,648,000 | £821,000 | £534,000 | £354,000 |
| 4 | 10% | £4,012,000 | £903,000 | £594,000 | £344,000 |
| 5 | 8% | £4,333,000 | £976,000 | £650,000 | £328,000 |
The DCF result sits above the multiple-based value, reflecting the strong growth assumptions in the forecast table. The headline valuation remains the Capitalised Adjusted Earnings result; the DCF illustrates the upside a buyer might attribute to the growth plan.
Cross-check only — the headline valuation remains the capitalised adjusted earnings basis.
Indicative value for a 100% controlling interest. Shown as a presentation line only — the headline equity value and valuation range are on the primary basis and exclude this premium.
Important Notice: This valuation report is provided for informational and illustrative purposes only. It is not intended as financial, legal, tax, or investment advice.
Tax and Specialist Advice Required: The equity value figures presented in this report are pre-tax valuations. Actual proceeds to shareholders will be subject to Capital Gains Tax (CGT), potential corporate taxes, and other applicable duties. Tax treatment varies significantly based on ownership structure, available reliefs (e.g., Business Asset Disposal Relief, Entrepreneurs' Relief), holding periods, and individual circumstances. You must seek specialist tax and legal advice before any transaction.
The valuation presented herein is based on information believed to be reliable and accurate at the time of preparation. However, no guarantee is made regarding the accuracy, completeness, or reliability of such information. Actual results may differ materially from the projections and assumptions used in this analysis.
This report does not constitute an offer to buy or sell securities or any business interest. Any transaction should be based on a comprehensive due diligence process and consultation with qualified professional advisors including accountants, solicitors, tax specialists, and corporate finance advisors.
Market conditions, economic factors, competitive dynamics, and company-specific circumstances can significantly impact actual business value. The indicative value presented should be considered as one data point among many in making strategic decisions.
By using this report, you acknowledge that the authors and providers bear no responsibility or liability for decisions made based on the information contained herein.
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