Demand stayed strong as customers sought valuations during company restructuring
Los Angeles, CA (PRWEB) February 22, 2012
In the five years to 2012, the Business Valuation Software industry is expected to grow 1.8% annually to $70.4 million. The rise of investor uncertainty and the decline of corporate profit during the recession caused companies to stop seeking acquisition targets. As a result, industry growth was kept low as the number of private business sales declined substantially. In 2009 alone, the number of private company sales dropped about 40.0%, according to Business Valuation Resources. This precipitous decline caused revenue to fall 10.1% during the year. Luckily for industry operators, business valuation is also used during business bankruptcies and restructuring. According to IBISWorld industry analyst Kevin Culbert, this factor caused a countercyclical boost during the recession as the number of business bankruptcies jumped annually from 2007 to 2009.
Companies use business valuation to determine the value of stock, buildings, equipment and intangible assets. By finding the financial worth of a business, companies are able to determine how much should be paid for an acquisition target or how much to seek when divesting operations. The products that the Business Valuation Software industry develops simplify this process, allowing users to generate, customize and format reports. Furthermore, “regulation is driving the standardization of financial reporting so users can help ensure compliance with industry software,” says Culbert. Firms also provide database add-ons, such as lists of transaction data. Business valuation software is used by a variety of downstream markets for different purposes, including for valuations related to mergers and acquisitions, pricing shares and litigation support.
During the next five years, valuation software is expected to become more powerful and offer a more credible threat for professional business appraisers. At the same time, the move toward software as a service (SaaS) is expected to contribute to price competition over the period, which will effectively push down profit. Industry profit will also be constrained by an increase in the number of players. Business valuation software is considered a vertical market software that is targeted at a narrow focus in the financial services market. As a result, the top two firms, ValuSource and Practitioners Publishing Company (PPC) benefit from their established brands, reputations and relationships. ValuSource enjoys strong partnerships with Microsoft and leading industry associations, while PPC benefits from its established reputation in the tax and accounting market and access to distribution channels through parent company Thomson Reuters. Notable smaller players include BizBuySell, Moneysoft and ValuAdder, which cater to various market segments. For more information, visit IBISWorld’s Business Valuation Software report in the US industry page.
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IBISWorld industry Report Key Topics
Companies in this industry develop software to help value a business based on some known key criteria about the business.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.