Accuracy

IDEAS » Innovation

Accur'Option®

Accuracy has developed a unique tool for management package (BSA, ADP, options, etc.) valuation and, more broadly, optional tools dedicated to private individuals. As pioneers in this field, we have established a methodology with the following objectives:

  • Consistency with the conventional theories of option valuation;
  • Protection of this investment’s tax treatment by demonstrating that these instruments were purchased at their fair value.

 

This tax protection can only be obtained by:

  • Implementing several valuation methods, like in any other valuation (company, brands, patents, etc.). This is all the more critical in the case of management packages given that the result can be somewhat difficult to comprehend by a third-party reader (“black box” effect);
  • Avoiding any assessment by the valuator on the predictable behaviour of the principal shareholder (for example, automatic exit in the event that a predetermined multiple is reached).

 

This type of valuation is very sensitive to certain parameters to be treated carefully:

  • Long-maturity options;
  • Declining financial leverage over time;
  • Impact of volatility;
  • Non-transferability of instruments;
  • Concentration of the financial risk of investors, not permitting a diversification or hedging of the normal risk.

 

We have assembled a team of consultants specialised in the valuation of management packages: alumni from the top engineering schools (X, Normale Sup, etc.), they have acquired the necessary technical expertise in financial mathematics to master the tools and the techniques for valuation of options and process an average of 80 valuations per year.

 

Since 2005, we have used this tool to perform valuations of more than 300 management packages, both as part of LBOs and for large listed groups, accumulating unrivalled experience and know-how.