Valuation of a renowned International School Chain
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Assignment
The owners of a prominent UAE-based school chain wanted an independent valuation for determining the carrying value of the investment on their holding company’s balance sheet. The chain includes K-12 premium schools from kindergarten to secondary education for expats and UAE nationals.
Our Approach
Outcome
We normalized the figures to arrive at a sustainable steady state earnings for each school separately. We then segregated the committed revenues & related expenses from one-off P&L items and summated them across the schools. This provided us a basis for calibrating the income pools along a risk scale for valuation purposes. We made use of industry metrics such as student lifetime value (SLV), student acquisition cost and retention rate in assessing the quality of earnings.
Using multiple methods we were able to provide the client with a robust point estimate of the value for financial reporting purposes.