Valuation of major airline’s intangible assets

A major African airline appointed Genesis Analytics to perform a valuation of its intangible assets. These assets do not appear on the airline’s reported balance sheet because they were developed internally over many years of operations.

Such assets include: brand names, trademarks, logos and corporate image; customer goodwill arising from reputation and route network; workforce skills and experience; and efficient/innovative systems and procedures.

Using corporate finance principles and financial modelling techniques, Genesis determined a market value of the airline’s aggregate intangible assets based on three different valuation approaches, namely Enterprise Value, EBITDA multiple and Market to Book multiple. Genesis also developed a user-friendly Excel model containing input financial data, assumptions and results.

Our valuation informed the airline of the fair value of its issued shares. This allowed the airline to negotiate a fair price for the buy-back of shares from a major shareholder.