(Alliance News) - Management Resource Solutions PLC said Wednesday that Leadenhall Services Pty Ltd has concluded its report setting out its opinion on the fair market value of Alerion Consulting Ltd, as per MRS's request.
In late March, Management Resource Solutions acquired aerial drone operator Alerion for AUD2.2 million, or GBP1.3 million. Management Resource Solutions issued 26.4 million shares at 5 pence each to Alerion's founder Elliott Talbott to cover for the acquisition cost.
In May, in response to the concerns of the large minority of shareholders, the company has launched a legal, and also valuation, review of the Alerion deal.
Leadenhall has determined that the fair market value of Alerion at the acquisition date was in the range of AUD2.2 million to AUD3.0 million, by applying a discounted cash flow analysis as the main valuation methodology.
Other methods in the review includes the management of cash flow forecasts, determining an appropriate post-tax discount rate, and conducting a sensitivity analysis to determine the sensitivity of the DCF value to several key assumptions.
"We always considered Alerion to be a value accretive addition to our business, enhancing the services we are able to provide to our customers and giving us a competitive advantage. At the same time, we recognised that some shareholders had concerns regarding the consideration that was paid by the company in the transaction," said Chief Executive Paul Brenton.
"Having commissioned Leadenhall Services to undertake an independent valuation report, we hope its conclusions will now allow us to move forward and focus on building a great business," Brenton added.
Shares in the company closed down 5.7% at 2.41 pence on Wednesday in London.