I set up my limited company in 2008 to in order to contract. Contracts lasted about 2 years and since then I've been freelancing. My main client offered me a job about 6 months ago but I politely declined. Now they've told me they want to acquire my company so that they can bring my services in-house allowing them to offer them as an add-on to their clients. They mentioned they want to keep my company brand and website, and for me to director of a new department in their company.
The company is just me, no other employees, with very few assets. I'm an IT specialist in a rather niche area, the market for which is pretty buoyant. They've asked for and I provided them with accounts for the last two financial years, the figures to date for 2013/14 and a forecast for the whole of 2013/14. This year already has outstripped last year in terms on profit, even though we're only 4 months in. How should I create a reasonable valuation of my company so I can negotiate when they offer me a figure at our next meeting? Do I use a profit forecast for 2013/14 using a multiplier of 5? Average profit for last three years? Any other method?
Any advice very gratefully received.
The company is just me, no other employees, with very few assets. I'm an IT specialist in a rather niche area, the market for which is pretty buoyant. They've asked for and I provided them with accounts for the last two financial years, the figures to date for 2013/14 and a forecast for the whole of 2013/14. This year already has outstripped last year in terms on profit, even though we're only 4 months in. How should I create a reasonable valuation of my company so I can negotiate when they offer me a figure at our next meeting? Do I use a profit forecast for 2013/14 using a multiplier of 5? Average profit for last three years? Any other method?
Any advice very gratefully received.
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