The partner of an internet provider operating in Minas Gerais and Espírito Santo, with revenue of around R$ 6.8 million, wanted to leave the business. His plan was to recover what he had already invested and, in his words, even double it.
His expectation was anchored in one number: the value of the network he had built.
The challenge
When analyzing documents and statements, Vispe found a different reality. The B2C operation was weak, with a low ticket and high cancellations, and cash generation was hurt by heavy investment in the long-haul network. The partner was in a hurry, because he wanted out as quickly as possible.
The process also had practical obstacles. Information was slow to arrive, and the data was disorganized, either untracked or read differently within the company itself.
How Vispe worked
The case required combining methodologies. The company had very large assets in infrastructure, but also a large cash deficit. Using discounted cash flow, the value would come in below the capital already invested in the network. So the valuation had to take both dimensions into account.
The decisive point was documentation. For a valuation to be accepted in a negotiation, it has to be auditable. And much of the investment in the network wasn't backed by invoices.
The results
The partner expected to get close to R$ 80 million. Based on the invoices and statements available, in an auditable way, the operation was valued at about R$ 35 million.
The gap had a clear explanation. If all the invoices for payments to the suppliers who built the network had been available, the valuation would have come close to the capital invested, above R$ 80 million. The work showed the partner, in concrete terms, how much the lack of professional management, especially on the tax side, was costing in value.
The report also revealed where the biggest value lever was. The long-haul network had the capacity to serve large companies, but the company focused its efforts on B2C. The infrastructure, its biggest asset, wasn't being used to generate business.
What changed
The result wasn't what the partner expected, and he was negatively surprised. But the report did its job: it gave a basis to look for other ways to estimate and negotiate the company. Vispe's recommendation was to hire an engineer to inventory the entire infrastructure, with models, brands, quantities and equipment prices, and to estimate the network's value at replacement cost. A company's value can't be just its assets, but the assets have to be proven to count.