Purchase Price Allocation

Purchase price allocation (PPA) is an area relevant to any company involved in the acquisition of another. When one company purchases another, the acquirer will typically be required to allocate the purchase price across various assets and liabilities acquired as part of the transaction. Whereas historically, intangible assets would be recorded under goodwill, today many accounting standards require them to be recognised and classified separately on the balance sheet. This impacts the final goodwill allocation as part of the transaction and can result in tax implications for the acquirer. The acquirer’s auditor is not permitted to perform the PPA itself, and will instead seek to instruct an independent, third-party valuation firm to conduct a PPA Valuation.

Hilco performs PPA Valuations in line with the requirements of the UK’s top auditors, spanning the Big Four to boutique regional firms. Our methodology captures and identifies a broad range of intangible assets under the relevant accounting standards, including brands and trade marks, patents, software, copyright, customer relationships, and order backlog.

We understand that PPA can be a complex and confusing area for companies, and that if valuers fail to deliver a smooth valuation process it can create unnecessary and costly work for auditors. At Hilco our goal is simple: to provide professional, audit friendly PPA Valuations conducted by our expert team of valuers in order to minimise unnecessary costs for the acquirer and auditor alike.

Our PPA Valuations are conducted by Hilco Streambank’s specialist intangible asset valuation team, which comprises an experienced team of professionals with decades of combined experience in what has traditionally been thought of as an emerging and niche market. While our team have worked on some of the UK’s highest profile acquisitions, with transactions in the hundreds of millions of pounds, we are capable of producing PPA Valuations for a wide range of businesses at varying scales, from industry leaders all the way to SMEs.

Outside of our intangible asset valuation team, Hilco employs valuation professionals covering all asset classes, from machinery & business assets, to inventory, to real estate, to accounts receivable. We are therefore able to offer specialist advice across a number of assets classes as part of our PPA Valuations, and this can provide added value to both acquirers and auditors in particularly challenging cases.