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Gooch adjusted Schlegel UK royalties, central management
overhead, and additional charges before applying the multiples to
Schlegel UK operating results. He gave more weight to the
results from the EBITDA and EBIT multiples because he considered
them to be more stable. He then applied a control premium to the
results of the market multiple comparison to take into
consideration synergies of a potential buyer, arriving at a value
of $23,870,000. Gooch concluded that the stand-alone value of
Schlegel UK was $20,350,000, applying no control premium.
Finally, Gooch applied an underlying asset approach to
valuing Schlegel UK. He indicated that the net working capital
as of June 30, 1989, was $6.82 million and that fixed assets had
a book value of approximately $10.85 million. At the end of
1989, fixed assets were written up to $19.84 million. After
adjustments for debt and timing issues, Gooch estimated that the
value was more likely to be restated to $19.22 million. In view
of the values derived from the income and market approaches,
Gooch stated that the liquidation value was a less reliable
indicator because the other approaches seemed to produce higher
values. Gooch gave equal weight to the synergistic and stand-
alone values from the various approaches set forth above,
concluding that the fair market value of Schlegel UK was
$21.7 million.
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