Brands are frequently a key driving force behind mergers and acquisitions. Ensuring that these brands are healthy prior to acquisition is an important step to ensuring value creation. Intangible Business helps companies identify brand health prior to acquisition and monitor brand equity on an ongoing basis, looking at the brand from both a financial and a marketing perspective. It helps being qualified accountants and marketers.
Areas of focus include a competitive and market analysis, gross margin evaluation in total, by channel and by product line, consumer research, historical and future sales, brand investment and net brand contribution (NBC). This, along with knowledge of brands and markets in a competitive context, paints a clear picture of the health of the brand in the eyes of both consumers and shareholders and is presented simply to management.
A brand valuation identifies areas of strength and weakness enabling management to deploy resource to rectify or exploit. This due diligence process illustrates to asset backers the state of the intangible assets being purchased. Rather like employing a structural engineer to carry out a survey on a property prior to purchase, Intangible Business is employed to carry out a similar process for brands and other intangible assets. It is also important to note that brands drive cash flows and this directly impacts the value of receivables and inventories.