Adviser Spring 2020

How much is my data worth? Current trends in business valuation

Decades, for whatever reason, come to be defined by events towards the end of the respective 10-year block. Did the sixties feel “Swinging” even though the contraceptive pill only became legalised for all women in 1967? Did the eighties always seem “Loadsamoney” despite those early 80s years of recession, strikes and the shadow of the Winter of Discontent? What will the 2020s have in store? How will the 2010s be remembered? A ccording to a recent article by historian Niall Ferguson, the four key themes of the 2010s were sluggish post-crisis growth, the recurrent threat of Islamist extremism, the West’s relative decline compared with China, and the increasing influence of the big American technology companies. Each theme drove a shift from the “global” to the “national”, with populist reactions across the world cutting across the established political order. Right, left and centre seemingly devoid of meaning. Trump, Xi Jinping, Macron have each been difficult to define politically other than “populist” in their given contexts. Our own, obvious, “global to national” populist spasm was, of course, Brexit. I think each of Ferguson’s themes will be important and will continue to develop in the 2020s.

However, technology is the one that most of us “touch” most each day and, whether we are conscious of it or not, it is technology that has, and will have, a sustained impact on us and how we continue to do business. Even the politicians have woken up to it. Google Tax, anyone? Yet it’s not really the technology that enables the American FAANGs (Facebook, Amazon, Apple, Netflix and Alphabet - formerly known as Google) to get their fangs into us. It is, more precisely, how they currently (or plan to) store, analyse, exploit, monetise, lose, misuse, manipulate or sell the “D Word”. Data. Our data (or is it ours?) is where the real value is. It is data which feeds and has sustained this technological development.

My practice in Scrutton Bland is focused around business transactions: acquisitions and disposals. It is around this point of the business lifecycle – the transaction – where the overall “value” of a business, much of which hitherto will have been amorphous and hypothetical (and often “internally generated”) is crystallised into hard cash. From a technical standpoint, my team boasts a Valuations Group of international repute: we have specific strengths in cases requiring heavy technical input and in areas of developing practice, including growth shares, control premia, and thought leadership around intangible assets. We work very closely with our professional body, the ICAEW, in this regard. So, the obvious question to ask as we head in to the 2020s is “what is the value of my data”? And, aside from selling a business, how may this value be unlocked? The value of “information assets” has never been greater. According to the European Commission, by 2020 the value of personalised data – just one class of data – will be one trillion euros, almost 8% of the EU’s GDP.

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