Brand valuation methodologies from Intangible Business can be used to identify underperforming business and intangible assets. Intangible Business maps the competitive market and carries out an assessment of the relative strengths, weaknesses, opportunities and threats. This assessment provides a view as to potential turnaround targets for M&A activity.
Strong brands can be an important feature in turnaround situations: there can often be a big disconnect between brand value and company performance. An underperforming business with a stable of valuable and potentially valuable brands can provide a high return opportunity for potential investors. Intangible Business also advises on suitable new management to put in place to run the business and assets and advises on brand and finance strategy to help turn the business around and extract value.
A risk assessment is also carried out, minimising potential investors' exposure to risk. Many industries rely on the intangible assets to generate value. Banks, for example, derive a large portion of their value from their customers. Customers can be valued in a similar way to brands and frequently command high valuations. And in FMCG industries, consumers have their relationships with the brand, not their owners and therefore the brands have high values. Consumers remain impartial to changes of ownership even when new owners are seemingly at odds with the brand values of the incumbent, as in the case of Green & Black's and Body Shop which were bought by Cadbury's and L'Oreal respectively. As so much value is tied up in the value of intangible assets, monitoring this value is essential to guaranteeing a healthy return.