Technical Capabilities

Davis Capital's technical capabilities meet and exceed expectations at every level. We are proficient in all of the valuation exercises typically performed at large investment banks, but add to these expert design and execution of custom models incorporating the leading edge of valuation techniques. This technical precision affords our clients the opportunity to run unlimited sensitivity analysis on financial projections, stress-test assumptions, gauge the immediate impact on returns from multiple transaction structures and ultimately determine the optimal capital structure for a company or transaction.

Market Approach
Davis Capital uses a market approach to valuation that incorporates comparable public company and comparable transaction analyses. In the current market environment, proper selection criteria are key to a market valuation. Failure to closely examine comparable groups can result in a value that does not represent the Company. We rely upon our intimate knowledge of specific companies and transactions to help inform our comparable group selection criteria and to eliminate those that are not representative of your business.

The Income Approach
Davis Capital relies on several common income models to derive valuations, including discounted cash flow analysis ("DCF"), capitalization of earnings and leveraged buyout analysis ("LBO"), as well as values based on book values or adjusted book values. No single approach is appropriate for all clients in all circumstances, and we make clear in our discussion of outputs what inputs were used to derive our valuations. These inputs are selected in partnership with our clients and with an eye to what range of possibilities is best in the current market environment.

Additional Approaches
We believe that every business is unique and that complex companies can often render simplistic valuation models puzzling at best. At Davis Capital, we are able to run and will consider esoteric approaches, including real option valuations, sum-of-the-parts analysis, Monte Carlo valuation and industry-specific metrics. We bring with us ample programming capabilities and a thorough understanding of risk and reward. The result is a more rigorous and technically thorough valuation analysis that incorporates a variety of methodologies for a more robust and supportable conclusion to enhance our transaction process.