Biography
Biography: Wim Westerman
Abstract
We study the case of a large Dutch firm, having conventional and non-conventional energy business, with also some presence in Europe and even beyond. Valuing energy firms does in principle not differ from valuing firms in general, although multi-level regulation issues and energy market developments blur the picture. Key value drivers include growth of revenues (prices x volumes), earnings before interest, depreciation and amortization margins to net sales (“EBITDA margins”), capital expenditures (“CAPEX”) and costs of capital. The actual valuation requires processing an array of data on regulation, market and firm specifics and much economically relevant as well as precise calculation work. We show with a checklist a vast number of relevant inputs to be taken into account for a transaction valuation. While our case valuation has decreasing practical relevance in the present energy markets, our methodology is still largely valid under the current technology driven circumstances.