Valuation Services

How does low interest rate environment impact valuations?

In recent years valuation analysis has been significantly complicated by the arguably distorting effect record (and near record) low interest rates. Some argue that there is no distortion as lower interest rates shold confer higher valuations on business enterprises. However, this fails to account for the various factors that have accompanied the lower interest rate environment including increased economic uncertainty, lower long term growth prospects, exchange rate volatility and increased corporate risk aversion which must also be considered.

Valuations and the Swiss market

Whilst Switzerland has experienced record low interest rates (and even negative interest rate levels) in recent years, the impact on corporate valuation is not straightforward given the offsetting impact of various factors including the appreciation of the Swiss Franc and economic uncertainty in the Euro region. As a result, there is a need to analyse each valuation on a case by case basis and to recognise that some traditional valuation indicators (e.g. benchmarks based on historical data) may no longer be particularly relevant. Additionally, for Swiss companies with operations in other European countries or outside Europe the inflation expectations as well as the exchange rate volatility is a challenge.

Informed decision require a profound valuation analysis

At Deloitte we recognise the importance of providing valuation advice that reflects the most recent economic developments. With this in mind, we adress various aspects of valuation through ongoing valuation research, collaboration with our international colleagues and thought leadership.

Our Swiss valuation team includes qualified professionals from a variety of backgrounds. In order to provide our clients with the best service and insights, we work closely together with our valuation colleagues from the global Deloitte valuation network and with specialised industry teams - this gives our clients access to a team of over 1,200 dedicated valuation experts operating in all major markets, industries and jurisdictions.

How Deloitte can help

Utilising our highly specialised skills, and a deep understanding of our clients` businesses and industry, we provide transformative insights to help turn critical and complex issues and transactions into opportunities for growth and long-term success.

From equity to capital assets, intellectual property, intangible assets and securities, our Valuation team helps clients, quantify, manage and build value. We serve as advisors on decisions related to mergers and acquisitions, litigation and disputes, bankruptcy and reorganisation, financial reporting, taxation, strategic planning and compliance.
Our services include:

• M&A Support: We provide valuation advice to management and stakeholders in M&A transactions, strategic reviews and capital investment appraisals throughout the entire deal cycle.
• Fairness opinions: We advise boards with independent fairness opinions in the context of public and private transactions. We are an accredited valuation firm with the Swiss Takeover Board.
• Transaction compliance support: we provide valuations related to financial reporting such as purchase price allocation, intangible assets, goodwill impairment, legal entities and IP for tax purposes.
• Contentious: We act as an expert witness, an independent expert appointed to determine a value or an advisor to one of the parties in litigations and arbitrations.
• Fund valuation: we provide funds with recurring portfolio valuations for various purposes