BVX Knowledge Base
BVX Knowledge Base
M&A University

BVX® - Best Value

BVX - Best Value is the optimal value that satisfies the needs of all parties to the transaction. It satisfies the "willing" seller objective of maximum price and the "willing" buyer objectives of ROE, debt-service and debt-availability. The cash flow calculation is after servicing debt interest and debt principal, after funding working capital and expenditures, and after paying all taxes. If the buyer pays a higher price than BVX - Best Value, he will have negative cash flow and lower ROE. If he puts in less equity than that determined by BVX - Best Value, he will have negative cash flow but higher ROE.

 

Deal Optimizer™ arrives at Best Value through an iterative process, not through any formula. The nature of the iterative process is such that it has to be told when to stop iterating. BVX has been programmed to stop iterating when it cannot improve Best Value beyond a certain tolerance level.

 

The speed and the ability to find BVX - Best Value depend on many factors including the number of digits in the data inputs. Fewer digits in the data field help accuracy, speed and BVX ability to find an optimal solution.