Acquisition Strategy and Target Valuations

Lumileds was interested in valuing specific targets to grow inorganically as a part of their overall corporate strategy.

The Situation

Lumileds had just spun off from Phillips.  The company quickly stabilized operations and established the necessary internal governance structure to execute acquisitions.  These acquisitions were expected to be relatively young companies and in adjacent high growth industries.  However, Lumileds had no tools or methodology in place to determine what these companies should be worth.

Our Solution

First, we developed and documented a methodology that we could put in place to get all of the stakeholders of each valuation effort to be totally aligned.  This document outlined roles and responsibilities during the Valuation Phase, provided an overview on how cost of capital should be calculated and it described the various valuation methodologies and when they should be used.

Second, we built custom valuation models to determine the intrinsic value of each company that they considered during the Acquisition Targeting phase.  These models also calculated the range of additional shareholder value that each acquisition could generate based on the price that Lumileds paid for the target.


  • Developed a Valuation Methodology where one did not previously exist
  • Built customized models to value and justify bids on multiple targets
  • Enabled the client’s valuation calculations to become a key component of their Due Diligence process when reviewing acquisition targets