The purpose of my paper is to determine the precise valuation of Metso Oyj (HEL: METSO) ("Metso” or “the Company”) using a selection of valuation approaches, including comparable company analysis (“comparables”), discounted cash flow analysis (“DCF”), and leveraged buyout (“LBO”) analysis coupled with the ability to pay analysis (“ATP”). Metso is a unique company that has a dominant position in the mining equipment industry with multiple business segments, geographically diversified sales, and complex business and revenue cycles. The combination of these factors makes the valuation of Metso a complex and academically demanding task that involves a meaningful volume of economic and financial research, analysis, and reasoning. The goal of this paper is to arrive at a justified and academically rigorous enterprise value for Metso and to create a functioning model for the valuation of such complex and diversified businesses, especially in the industrial sector. The paper is based on Metso’s investor and sales materials, industry research, brokerage reports, and academic and professional literature on the industry, valuation, and financial analysis. The valuation of Metso is further complicated by the fact that the company is headquartered in Finland, which leads to meaningful differences between the reporting and accounting standards that the company uses and the ones employed in the United States. A significant portion of the paper is dedicated to financial analysis of the company’s reported financial statements and their projection based on professional and academic research.
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