Loading
Insight - 23 August 2022

Insight – Valuing the complex, large and unconventional

Valuing the complex, large and unconventional

Hilco Global APAC’s Raymond Siem shares how Hilco Global APAC approaches highly specialist asset valuations.

Raymond Siem is one of the appointed Directors of Deals and Origination at Hilco Global APAC  – world renowned for its expertise in asset valuations. He supports clients across the region who require valuations for balance sheet assets, particularly those that are large, complex and/or unconventional.

Raymond is one of a new breed of executives in Hilco – one who has a financial and banking background. In his appointment, Hilco has recognised the way that the valuation sector is changing and that a variety of skills strengthen the organisation and add even greater value to its clients.

In this interview with Raymond, he explains what brought him to this role, and uses a recently published customer story to illustrate how he and his colleagues provide their highly specialist service and what it means to their clients.

Raymond, what was your background before joining Hilco Global APAC?

‘I come from a banking background – I spent 20 years with several international banks, where I built up experience in mergers & acquisitions, corporate finance, corporate banking, credit, debt, capital markets and working with financial institutions. I also learnt much about trade finance during my five year tenure with Cargill – the world’s largest privately-owned trading company – in their Structured Trade Finance division. There I gained experience of originating and structuring trade finance assets and creating financial solutions to facilitate trade.’

How are your skills relevant to helping Hilco Global APAC to develop and succeed?

‘Hilco are increasingly focussed on complex transactions, which means they are interacting more with private equity firms and lenders. Banks are becoming more involved with lending to PEs and VCs, so Hilco wanted to bring in someone who is familiar with banking and financial markets. I bring that experience and expertise – I speak the same language as the banks and can facilitate a smooth engagement.

There’s a recent client story that illustrates what you and your team offer – can you tell us about that?

‘Yes – it’s a great story. Our client is a global accounting firm, that was appointed auditor by a private equity firm that recently acquired high-speed telecommunications network linking Australia, Singapore and Hong Kong. There is robust growth potential for B2B communications in the region, with Hong Kong home to a number of Multi-National Companies focussing on the China market, and Singapore being the hub for commerce and data across southeast Asia.

As part of the post-purchase process, our client is required to determine the Fair Value (“FV”) of the underlying infrastructure. Companies derive a large part of their overall value from their assets, particularly in a case like this, where the business simply cannot operate without them. Accurate valuations are therefore essential, but FV is calculated and assessed differently to Carrying Value, which is what was used to determine pricing at the time of the transaction.

The post-purchase FV opinion was a requirement under International Financial Reporting Standard 3 (IFRS3), triggered by the change of control brought about by the acquisition.

As you would imagine, the accounting firm had plenty of experience with financial valuations, but they did not have the specialist expertise for asset valuations. Particularly an asset like an undersea and underground cable, which is highly complex, large and unconventional – not the sort of asset that you see every day. With strict compliance regulations, they knew they had to get this right, and that their reputation was on the line. They realised they needed help, and knew of Hilco Global’s expertise in complex asset valuations. That’s one of the reasons why they approached us.’

How did Hilco Global approach this asset valuation?

‘As with all our complex asset appraisals, our approach had several elements.

First and foremost, we use our proprietary global asset database. This includes assets of all classes – plant, machinery, mining assets, shipping, marine vessels, and of course cabling. With every valuation that we complete, we add to the database and to our knowledge. As one of the largest asset valuers in the world, Hilco Global has over 250 valuation specialists, and completes over 2000 valuations a month, so as you can imagine, there is a wealth of information in our system.

We support our valuations by benchmarking against similar transactions in the same sector. We collaborate with other organisations – sometimes they’re our competitors, but in the world of valuations, we all understand that it’s important to partner to get the best outcome for the client.

Finally, we support our valuation by talking to manufacturers and suppliers of the asset – in this case cable hardware.’

What were the benefits to your client of Hilco Global’s approach?

‘Our client was confident that they had a high quality, accurate asset valuation. The valuation allowed them to adjust the fixed assets involved in the transaction and record them at Fair Value (FV). They could then determine the purchase price to allocate to intangible assets and goodwill.

The benefits went beyond our client, and helped their client too. The buyers cemented their belief that they made the right decision when they elected to make the purchase.’

What do clients expect when they engage your team at Hilco Global APAC?

‘Hilco has a solid, global reputation, so they expect a thorough approach and an accurate valuation, even for the most complex assets.

They expect to protect and enhance their own reputation, and trust us to help them deliver the best outcomes to their clients.

The assets we value often sit across multiple countries, as was the case here. So clients expect a presence in multiple locations across APAC and the world, which we have, with offices in Australia, Indonesia, Singapore, Malaysia and the Philippines and beyond.

When we engage for pre-purchase valuations, our clients expect to get a thorough understanding of the assets they plan to purchase and a confidence that they are not overpaying. They expect to get data that will help them secure the lending they need, enabling them to execute the transaction faster. If they plan to dispose of some or all of the assets we have valued, they expect to be able to return to us for help with finding the right buyer, or even for us to purchase the assets directly.’

Do you see future benefits for Hilco from this valuation work?

‘Certainly. I foresee that this client would engage Hilco Global again for valuations, because we helped them to complete the work needed for compliance. In future, I would hope that we can also help them with pre-purchase valuations.’

Raymond is thrilled to be able to bring his own unique blend of skills and experience to Hilco Global APAC. If you require thorough, professional and accurate valuations – even of the most complex assets – do reach out. Raymond would be delighted to help.

About Hilco Valuations & Diligence Services

Hilco APAC is the industry’s trusted partner in the valuation of tangible and intangible assets and their verification for a wide range of lending, financial sponsoring, and strategic business activities. We specialise in all asset classes on the balance sheet, including Inventory, Plant & Equipment, Intangibles, Property, and Accounts Receivable as well as enterprise valuations on businesses and contracted income. Our team of over 100 professionals across the globe has assisted businesses with over 25,000 valuation assignments, providing independent, accurate and time-critical reports to help those organisations better manage their critical financial decisions and negotiations.

 

Raymond Siem is the Director of Deals & Origination at Hilco Global APAC, Ray brings more than 25 years of business development experience in his professional banking and trading career. With in depth knowledge of origination and strong financial oversight in the structured financing and lending space, Ray has been responsible for originating various debt markets and trade finance solutions, managing client portfolios, developing strategic relationships, negotiating contract terms and conditions, as well as underwriting and advising financial solutions for many complex commercial transactions. Prior to joining Hilco, Ray most recently served as Business Development Head – Asia region for Triterras Fintech Pte Ltd, and was responsible for originating new business, negotiating commercial contracts, as well as assisting Distribution Team with the structuring of trade financing deals.

Find out more about how we assist lenders and investors with a range of valuation & diligence services by contacting our team today for a confidential discussion.

 

Contact our APAC Valuations & Diligence Services Specialists

Published: Kristine Gonzales