The buyer is valuing our business strictly on a public comparable market approach, but our local market has unique regulatory protections. How do we use the International Valuation Standards framework to defend a localized premium?

Question

Tyler Smith · Accepted Answer

Relying solely on a public comparable market approach is a classic buy-side tactic to depress your valuation. Public markets represent highly liquid, massive corporations that operate under entirely different dynamics than a localized mid-market business.

To challenge this, you must anchor your defense in the International Valuation Standards framework, which requires valuers to consider the specific characteristics of the subject asset and its local market. Your local regulatory protections create a high barrier to entry and a predictable revenue stream that public companies do not possess.

When defending your valuation, force the buyer to combine the market approach with the income approach. Use the Capitalization of Earnings method to show how your local regulatory moat guarantees stable, long-term cash flows.

Present historical data showing that your margins are more resilient than those of the public peers they are using as benchmarks. Use your V/TO® to demonstrate your market dominance and proven execution history. By combining these methodologies, you show that your business deserves a premium multiple because your local regulatory protections drastically lower the investment risk. Do not let them value a highly protected local gem using generic national stock market averages.