Value Bridge

An actuarial valuation methodology used to value life insurance companies, representing the present value of future profits from the existing book of insurance policies (the value of in-force business) plus the adjusted net asset value of the company. Embedded value is the standard valuation framework for life insurers and is analogous to the net asset value plus intangible asset value approach used in other industries.

The estimated value of a business or asset beyond the explicit forecast period in a discounted cash flow analysis, representing the bulk of total enterprise value for long-lived assets. Terminal value is calculated using either a perpetuity growth model or an exit multiple approach and is particularly significant for intangible-intensive companies with long-duration competitive advantages.

A private equity and venture capital performance metric combining both realised returns (distributions) and unrealised value (remaining portfolio value) relative to total capital contributed. TVPI equals DPI plus RVPI and provides the most complete picture of a fund's overall performance.

The additional value created when two businesses combine that neither could achieve independently. Synergy value arises from cost savings, revenue enhancements, or operational efficiencies post-merger, and is a key driver of acquisition premiums.

The US GAAP standard that defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Short-term funding used to bridge the gap between two financing rounds or before an anticipated liquidity event. Bridge loans or convertible notes are common structures, often provided by existing investors to sustain operations until the next milestone.

The price that would be received to sell an asset or cash generating unit in an orderly transaction between market participants (IFRS 13), less the costs of disposal. Under IAS 36, it is one of two measures used to determine the recoverable amount for impairment testing.

The EU regulatory framework for insurance and reinsurance companies, establishing risk-based capital requirements, governance standards, and supervisory reporting obligations. Solvency II uses a three-pillar structure: quantitative requirements (Pillar 1), governance and risk management (Pillar 2), and disclosure and transparency (Pillar 3).

What are synergies in an acquisition?

Synergies are the additional value created by combining two businesses — cost synergies from removing duplication, and revenue synergies from cross-selling or reaching new markets — that neither would achieve alone.

How does a buy-and-build strategy work?

You acquire a platform business, then add a series of smaller bolt-on acquisitions to it over time, compounding scale and, often, re-rating the enlarged group to a higher multiple than the parts commanded alone.

What is a 100-day plan?

A 100-day plan is the structured programme an acquirer follows in the first roughly three months after completion to stabilise the business, retain its people and customers, and begin realising the synergies that justified the deal.