Brands in M&As
Updated: Mar 19, 2021
We are now bringing a new concept to the market, called Brand Due Diligence. This concept integrates brand into the entire acquisition pipeline, from pre stage due diligence to post-merger integration. The concept is based on our extensive experience in business development consulting for our clients. We are now bringing the concept into acquisition cases together with our partner, the law firm Roschier.
In a Brand Due Diligence process, we conduct a Brand Audit, thoroughly auditing the competitive position of a company and/or its brands. This allows us to formulate the amount of measurable competitive advantage and the monetary value of it.
In large scale acquisitions, a Commercial Due Diligence is typically conducted to specify the competitive position and current state of business of the target company. However, these assessments usually fail to formulate the amount of competitive advantage due to the difficulty of its measurement.
Brand Audit meets this need. Brand Audit is based on the ISO Standards ISO 10668 (Brand Valuation) and ISO 20671 (Brand Evaluation), both of which BrandWorxx has been defining as part of the ISO/TC 289 committee, together with the world’s leading accountants and brand-driven strategy consultants. In the field of business combinations in Finland, brand valuation is still uncommon and inadequate, although the IFRS 3 Standard requires that the acquiring side disclose all transferred assets if they are separable according to the IAS 38 Standard. With ISO standardization, we have solved the problem of measuring brand as a separable asset, which is why we recommend the valuation of brands in all mergers and acquisitions under IFRS.
Elements of goodwill – economic reasons for a positive residual amount (examples)
BrandWorxx is a strategy partner for top executives, helping company management better acknowledge the intangible assets (especially brand) in strategy, company management and M&As.