We value technology companies with digital mindset. We believe that technology companies should be valued with digital mindset. We know valuation of technology companies with traditional valuation methods would always yield wrong and incomplete results.
Traditional company valuation methods give the standalone value of the company. They do not take into account the synergy that come out after the merger or acquisition.
Slightly more advanced methods, which are based on traditional company valuation methods, take into account only cost savings and increased turnover from the synergies created after the merger or acquisition. But this, too, leads to wrong and incomplete results.
Valuation with a digital mindset takes into account the contribution of the M&A operation to the acceleration of the acquired company and the growth of the acquiring company's core business, in addition to the company's stand-alone value and cost-turnover synergies.
Traditional methods are divided into three as asset-based valuation methods, market-based valuation methods and income-based valuation methods.
Asset-based valuation methods generally take the equity figure in the balance sheet as value and do not take into account concerns like company's growth trend and technological know-how.
In market-based valuation methods, a comparison is made between similar companies traded in the stock exchange and the company to be valued, over the ratios. This method will not work when no similar companies listed on the stock exchange are found.
In income-based valuation methods, the net income that the company will generate in the future is discounted to the date of the valuation with a discount rate. In this method, too, the value may vary greatly depending on the estimations to be made.
In all these traditional methods, the focus is on the standalone value of the company.
The focus is not on the value impact of M&A.
In summary, these three methods are not sufficient to determine the fair value in the valuation of technology companies.
We value technology companies with a digital mindset. Because; we know this is the right thing to do and we can do it.
Because; we know the technology sector and the dynamics of the technology businesses.
