Private Company Share Valuation

Private company share valuations are often required for a range of commercial and tax‑related purposes, whether supporting a business sale or acquisition, assisting with probate, or implementing an employee incentive arrangement.

With no public market price to rely on, valuing shares in a private company is a highly technical exercise, and we have developed significant expertise in delivering accurate, defensible valuations.

Valuing a private company can be challenging due to the number of assumptions involved and the absence of an open market comparison. While there is no single “correct” valuation method, a robust valuation is achieved through a detailed understanding of the business, its financial performance, and the market in which it operates.

Valuation Approaches

The first step is identifying the most appropriate valuation basis. This will depend on the type of company being valued, its trading history, and any recent share activity.

Common bases include:

• Earnings Basis

  Applying a suitable price‑to‑earnings (P/E) multiple to maintainable adjusted future earnings, with the chosen multiple reflecting the sector, size, and risk profile of the company.

• Asset‑Based Valuation

  Assessing the value of the company’s net assets, adjusted for market value where appropriate.

• Return on Capital Employed

  Valuing the business based on the returns generated relative to the capital invested.

• Recent Share Transactions

  Using evidence from recent share sales or transfers as a benchmark, where reliable and relevant.

• Combination Approach

  In many cases, value is derived from a blend of earnings and asset‑based metrics, particularly where the business holds significant “extra” net assets such as freehold property, intellectual property, or surplus working capital.

Where needed, we engage with HMRC’s Shares Valuation Division on your behalf, particularly regarding shareholding discounts, valuation methodology, and agreement of the underlying calculations.

Our Process

To deliver a clear, well‑supported valuation, we follow a structured process:

1. Initial Fact‑Find Meeting
   

   Understanding the background, business model, shareholder circumstances, and specific valuation requirements.

2. Business and Market Research
   

   Reviewing company financials, operational structure, sector performance, and available market data, including relevant multiples or comparative transactions.

3. Valuation Report Preparation
   

   Producing a comprehensive valuation report, including all assumptions, methodologies used, and supporting computations.

4. Presentation to Stakeholders and HMRC
   

   Presenting and explaining the valuation to the Board, shareholders, and HMRC where required.

Focused on Your Objectives

We tailor our approach to your priorities whether that is achieving a fair value for commercial negotiations, minimising tax exposure in connection with an Employee Incentive Scheme, or providing an independent assessment for estate or probate purposes.

You can be confident that the valuation will be carefully constructed, methodologically sound, and aligned with your commercial goals.