Contribute to the BV profession in 2023

During 2022, we saw many examples of BV practitioners giving back to the profession—from volunteering on a board to speaking at a conference to writing an article. The valuation professional organizations—the ASA, AICPA, IACVS and NACVA—are always in need of practitioners to help with education, guidance, or standards matters. The Appraisal Foundation often has opportunities to volunteer on boards and committees, and, on the global front, so does the International Valuation Standards Council (IVSC). In addition to helping the profession, the more you volunteer, write, teach, or speak, the more you learn about your profession. What’s more, you can be on the cutting edge of new guidance that your committee or work group is developing. So, if you haven’t yet contributed to the profession, think about doing so in 2023!

Lack of quantifiable damages dooms IP complaint

In a California case concerning intellectual property (IP), the defendant asked the court to dismiss the plaintiff’s complaint alleging violations of the state’s Unfair Competition Law (UCL) and asking for damages. To seek relief under the UCL, the plaintiff must show that there must be an “injury in fact and [that the plaintiff] has lost money or property as a result of the unfair competition,” the court wrote. “Although ‘the issue here is only the threshold matter of standing … [and] a specific measure of the amount of [the alleged] loss is not required,’ some detail as to the general value of the alleged injury is still necessary to allege damages under a UCL claim.” The plaintiff had not done this, and, therefore, the motion to dismiss was granted.

This case “should point out to attorneys and BV professionals alike that, even at the preliminary level, it is important that there be some clarity on at a minimum a range of damages or demonstration of a process that will determine that there are indeed damages,” writes BVLaw editor Jim Alerding (Alerding Consulting) in a case digest. “I have been involved in cases where the attorneys have come to me after the filing of a complaint and asked me to tell them whether there are quantifiable damages. In at least one case, there were not, and the complaint was withdrawn.”

The case is Zamfir v CasperLabs, LLC, 2022 U.S. Dist. LEXIS 194566; 2022 WL 14915618, and a case analysis and full court opinion are available on the BVLaw platform.

Recession tops Kroll’s 10 trends to watch in 2023

The new year “promises to be a tougher ride for most businesses, investors and consumers globally, but there is always opportunity in volatility,” according to the Kroll Institute in its latest report, “10 Trends to Watch Heading Into 2023.” These trends are:

• Developed markets in recession. (Countercyclical businesses should see increased deal flow.)
• Emerging markets: buoying global growth. (But there are risks to the outlook for China.)
• Emerging markets face a sovereign debt crisis. (Could embroil some middle- and particularly low-income countries.)
• Volatile financial markets and market dislocations. (Earnings pressure will likely persist into much of 2023, particularly for companies more vulnerable to interest rate rises or recession.)
• Developing global trade tensions. (Between the U.S. and China, and maybe between the U.S. and Europe.)
• Russia war on Ukraine persists. (Possible escalation scenarios cannot be ruled out for 2023.)
• “Old” and “tropical” infectious disease outbreaks. (The virus lingers, and others may emerge.)
• Growth of ESG regulation, transparency, and scrutiny. (This should improve measurement issues and reduce greenwashing.)
• Heightened regulatory environment. (The SEC will focus on imposing new rules in such areas as cybersecurity, certain private fund practices, SPACs, and more.)
• Increased cyber and social media risks. (But this will give a boost to the cybersecurity industry.)

“Rarely has the world faced this many interconnected crises but we expect that the outlook in 2024 will be less volatile, with most of the developed world coming out of a shallow recession, inflation abating, and the green transition having made significant progress, particularly in Europe,” the report says. For more on the Kroll Institute, click here.

Private-company EBITDA multiples rebounded in 3Q2022

After dropping to their lowest levels in recent years, EBITDA multiples rose to a median

of 3.7x in the third quarter of 2022, up from 2.8x in the second quarter (see graph below), according to the latest issue of the DealStats Value Index (DVI). In the period analyzed, EBITDA multiples across all industries were highest in the third quarter of 2018, at 5.0x, but then decreased until they bottomed out in the first half of 2022.

The 30-page DealStats Value Index is a quarterly publication exclusively for DealStats subscribers. It provides trend information on valuation multiples and profit margins for transactions in DealStats, including multiples and margins by industry sector, interquartile range by sector and year, multiples and margins for private vs. public, and much more. If you are a subscriber to DealStats, you can download the current issue to see all the latest transaction trends if you click here.

Data on preowned medical equipment prices

The “BuckheadFMV January 2023 Benchmark Report on Pre-Owned Medical Equipment Prices” is now available. Based on data BFMV staff collected for the 36 months preceding publication, the report provides price benchmarks for over 800 different models of preowned medical equipment. Benchmarks are sorted by category, manufacturer/brand, and model, and are reported at the 25th, 50th, 75th, and 90th percentiles, along with an average price reported for each item. The report is currently scheduled to be published in January and July of each year. Click here for more information.

 

Global BV News

IVSC will propose changes to IVS