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Central European Journal of Operations Research

, Volume 27, Issue 4, pp 1079–1105 | Cite as

A nonlinear state marginal price vector model for the task of business valuation. A case study: The dimensioning of IT-service companies under nonlinear synergy effects

  • Christian TollEmail author
  • Olaf Kintzel
Original Paper
  • 432 Downloads

Abstract

In the present contribution we present a nonlinear extension of the innovative linear investment-oriented company valuation method and so-called state marginal price vector model of Toll which represents a two-step procedure separated into a base and a valuation approach. As novel aspect we address nonlinear synergy effects in M&A’s. For this purpose we introduce a nonlinear framework within a semi-discrete convex optimization approach. As capital market assumption we simulate an imperfect market. To demonstrate the usefulness of the method, we address a case study of a merger of two IT-service companies. The related valuation and dimensioning of capacities is done by solving a multi-period newsvendor model under stochastic demand. The demonstrated nonlinear framework is shown to be suitable for a wide range of business valuation tasks.

Keywords

Investment analysis Company/business valuation Nonlinear convex programming Nonlinear synergy effects Multi-period newsvendor/newsboy model IT-service companies 

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Faculty of Business Administration and Economics, Department of Investment Theory and Business ValuationFernuniversität HagenHagenGermany

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