The client was a Middle Eastern finance house that had invested in a Jordanian pharmaceutical company. This company manufactures and sells human-based insulin, a range of intra-venous solutions and haemodialysis solutions under a license. The client was reviewing its portfolio of investments and required an objective valuation of its investment in the Jordanian pharmaceutical company.
UC Strategy conducted a valuation of the Jordanian pharmaceutical company, taking the steps as described below:
- Gained a comprehensive perspective of the local and export markets for the company’s products as well as a perspective on the competitive landscape in the region
- Based on the above understanding, UC Strategy developed sales forecasts for the company’s products for the next 10 years based on 3 potential scenarios; conservative, realistic and optimistic
- Developed the company’s expected profit and loss statement and cash flow statement for the next 10 years after assuming factors such as:
- Sales forecasts
- Sales price to achieve the forecasted volumes
- Costs of manufacturing and marketing to manufacture and sell the forecasted volumes
- Further to this we calculated the value of the company in all 3 potential scenarios using the discounted cash flow valuation method
- Assuming probabilities of each of the scenarios taking place, we arrived at the final valuation of the company
The client obtained a realistic assessment of the market value of the company, supported by financial projections and justifications for the same. UC Strategy formed the basis for the client to take decisions on how the investment should be dealt with in the future.