We have built an internal AI platform that acts as our primary operational leverage, and we want to use a sum of the parts valuation method to value our services division and our technology division separately. How do we structure our financial statements and operational data to force the buyer's valuation model to accept two different multiples?

Question

Tyler Smith · Accepted Answer

If you have built custom AI systems or proprietary software that gives your services business a massive operational advantage, do not let the buyer value the entire company on a single services multiple. You deserve to capture a blended multiple that recognizes the tech platform's value.

To achieve this, you must run a sum of the parts valuation by cleanly separating your financials and operational metrics. Step one is to isolate the technology. Create a separate profit center or subsidiary for your software platform, and establish clear transfer pricing agreements where your services division pays a licensing fee to the software division.

Next, use your EOS® Accountability Chart to separate the teams. Show the buyer that your software developers and system architects are distinct from your service delivery staff. This proves the technology is an independent, scalable asset rather than just an internal utility.

In your financial models, present two distinct revenue streams. The services revenue will carry your typical industry multiple, but the internal licensing and software-related margins can be valued at a higher software-as-a-service multiple.

By presenting clean, segregated data backed by real intercompany agreements, you force the buyer's analysts to run a blended model, maximizing your overall transaction value.