Sectors

Private Equity & M&A

For the Private Equity fund or M&A team that needs to know what a target's industrial base is worth before signing the SPA. Defensible before a Big Four auditor.

If you run a Private Equity fund or an M&A team, the balance sheet of your target tells you what it is worth on paper. Before you sign the SPA, you need independent technical due diligence that tells you what the industrial base is really worth — and where the risks are hiding.

For the target you are pricing, machinery, production lines and facilities represent a significant share of the Enterprise Value. Their correct valuation determines three things: the price negotiated in the SPA, the accounting allocation of the purchase price (PPA) and the post-closing investment plan. All three uses demand an independent valuation — not a seller's estimate or a projection from the balance sheet.

Capital Appraisal supports Private Equity funds, corporate development teams, investment banks and M&A advisers across the full transaction cycle. Industrial due diligence identifies what the financial statements do not show: obsolete assets, equipment with its useful life exhausted, unbudgeted deferred CAPEX and discrepancies between the accounting inventory and the reality of the plant.

For PPA we issue fair value valuations at individual item level under RICS Red Book standards, defensible before a Big Four auditor. The difference from a generic valuer is knowledge of the industrial secondary market: we do not value what the depreciation schedule says, we value what you would actually obtain in an exit transaction — the critical figure for negotiating the price.

Related sectors Banking & financingRestructuring & insolvency

Transaction cycle

The four phases in which we add value

Industrial technical input covers the full M&A cycle: from pre-signing due diligence to post-closing PPA and subsequent monitoring. Each phase has a deliverable defensible before the investment committee and the auditor.

  1. Pre-signing due diligence (4-8 weeks)

    Plant inspection, technical inventory, assessment of condition and obsolescence, identification of red flags (assets at the end of their useful life, deferred CAPEX, regulatory risks). Output: a risk matrix by asset + a value range + a recommendation to adjust the price in the SPA. Synchronised with the financial and legal DD of the transaction lead.

  2. SPA negotiation (one-off)

    Quantitative support to the M&A team in negotiating the price, representations and warranties relating to the asset base, earn-out clauses linked to technical condition and post-closing CAPEX commitments. The traceability of the RICS report avoids subsequent disputes.

  3. Post-closing PPA · IFRS 3 (8-12 weeks)

    Accounting allocation of the price paid across the various assets acquired. Fair value by item under RICS Red Book, defensible before the buyer's auditor (typically Big Four). We reuse the technical capture from the DD to accelerate the process. Deliverable: a PPA report + documentary back-up by asset.

  4. Monitoring of the post-closing industrial plan

    For PE funds: half-yearly or annual revaluations of the asset base, monitoring of compliance with committed CAPEX, early obsolescence alerts and support on add-on operations. Continuity of the valuer reduces friction and keeps the basis of comparison live throughout the holding period.

Sector references

Indicative figures for industrial M&A operations in Spain

Typical ranges observed in mid-market industrial M&A in the Iberian market (2022-2025). Each operation is calibrated to its specific profile.

EV/EBITDA multiple · manufacturing
5-8×
EV/EBITDA multiple · technology
8-14×
Weight of assets in EV · industrial
25-60%
Industrial DD · typical timeframe
4-8 weeks
Post-closing PPA · IFRS 3
8-12 weeks
Deferred CAPEX uncovered
5-15% EV
Price adjustment after DD
2-8%
Average PE holding period
3-7 years
Regulatory framework

Regulation applicable to M&A operations

RICS Red Book · IVS
The global valuation standard. The investment committee and the auditor require this framework. Capital Appraisal operates as a firm regulated by RICS — the MRICS designation signs every report.
IFRS 3 · Business combinations
The standard that governs the PPA. It requires a fair value allocation of the price paid across acquired assets, residual goodwill and assumed liabilities. Capital Appraisal issues the part corresponding to tangible and intangible industrial assets.
IFRS 13 · Fair Value Measurement
The standard that defines how fair value is measured. It establishes the hierarchy of inputs (level 1, 2 and 3) — industrial assets usually fall into level 2 (with observable market inputs) or level 3 (with significant unobservable inputs and a higher documentation requirement).
IFRS 16 · Leases
Relevant in operations where the target has significant operating lease contracts (warehouses, leased lines). Their accounting treatment materially affects the Enterprise Value and the post-closing balance sheet.
Spanish GAAP · General Accounting Plan
The local accounting framework applicable to Spanish companies not consolidated under IFRS. Price allocation under Spanish GAAP follows analogous principles but with its own nuances — the report is adapted to the buyer's framework.
CNMC / Competition authority
M&A operations subject to merger control require defensible technical documentation. Independent valuation under RICS facilitates the filing before the CNMC when the scope of the relevant market or the weight of the industrial assets is in question.
Representative examples

Three anonymised scenarios

Operations completed over the last 24 months (anonymised data — the sector, the size range, the timeframe and the scope are verifiable under audit).

Operation Sector Target EV Assets in EV Timeframe Outcome
Pre-signing DD + PPA Automotive ~€140M ~32% 10 weeks 6% price adjustment after DD
Pre-signing DD Pharmaceutical ~€80M ~45% 6 weeks €8M of deferred CAPEX identified
Post-closing PPA Metallurgy ~€210M ~58% 11 weeks Defended before Big Four with no objections

Figures rounded. "Assets in EV" = estimated weight of industrial tangible assets in the Enterprise Value. "Timeframe" = duration of the Capital Appraisal engagement.

Key benefits

  • Independent valuation asset by asset, not aggregated — the buyer knows exactly what they are paying for
  • Post-closing purchase price allocation (PPA) under IFRS 3, ready for a Big Four auditor
  • Identification of hidden risks: equipment at the end of its useful life, deferred investment, discrepancies with the accounting inventory
  • Quantitative support in negotiating the SPA price (Share Purchase Agreement)
  • An objective basis for the investment committee — defensible before the sponsor and the financing bank

Who it is for

Private Equity funds
Corporate development teams (in-house M&A at large companies)
Investment banks and M&A boutiques
Legal and financial advisers on transactions

Related services

Industrial Assets

Industrial machinery, productive equipment, vehicles and intangible assets. Reports with legal, tax and banking validity, RICS Red Book compliant, delivered from 48 hours.

Due Diligence

Technical, regulatory and legal analysis of the asset base for M&A, Private Equity and restructurings: uncovers hidden risks, deferred CAPEX and contingencies of the productive asset base.

Consultancy

Financial modelling, transaction advisory and capital optimisation across the industrial asset base, with RICS rigour for defensible investment decisions.

Need to know the real value of your assets?

Request your valuation. First contact, scope and fees with no obligation, under the RICS Red Book standard.

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No obligation · RICS-regulated firm · European coverage