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Business case

Business plan review

Sub-industry: Metals & Mining


Our client, a publicly traded Canadian entity owning a zinc smelting facility, engaged Accuracy to deliver a formal valuation report and issue a fairness opinion in the context of a proposed takeover from a minority unitholder holding 25% of the stock.

Key Takeaway

We concluded that the offer made by the minority unitholder was fair from a financial point of view considering our FMV conclusion as well as qualitative considerations and alternative options available to the fund. In particular, the smelting facility experienced major operating issues over the last quarter of 2022 due to unusual maintenance repairs that will require major capital investments in the next few years. We also faced several challenges in the DCF model due to the high volatility of the fund’s financial performance explained by exposure to market conditions (supply and demand), including commodity trends (zinc prices).

Accuracy Role

We conducted a detailed review of the target’s BP and historical financial performance, as well as an analysis of the zinc market to determine the fair market value of the fund’s units using primarily the DCF method but also a market-based approach (comparable companies and transactions multiples).