Whether you’re issuing shares, restructuring a business, or preparing for a transaction, an independent share valuation provides the clarity and compliance you need. At Alpha Valuations, we specialise in valuing private company shares for tax, legal, and commercial purposes — grounded in expert analysis and delivered with precision.

Our experienced team works with entrepreneurs, boards, and legal professionals to determine fair market value for shareholding transactions, corporate restructures, estate planning, and more.

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What is Share Valuation?

Share valuation is the process of determining the fair market value of a company’s shares, whether for a minority or majority stake. It plays a critical role in transactions, restructures, estate transfers, shareholder exits, and legal disputes.

Unlike business valuations, which assess the value of the entire business, share valuations focus on the specific ownership interest, taking into account factors such as control, liquidity, and minority discounts or premiums as well as the net debt position of the business as of the valuation date.

Reasons for Valuations of Shares

There are many situations where knowing the true value of a shareholding is essential. Whether you’re navigating a shareholder exit, planning a restructure, or managing an estate, a reliable share valuation report ensures fairness and clarity at every step.

Some common reasons for share valuation include:

  • Share Buybacks or Transfers: To determine a fair price for purchasing or transferring shares between shareholders or the company itself.
  • Exit of a Shareholder: Helps ensure departing shareholders receive a justifiable value for their ownership stake.
  • Dispute Resolution: Provides an objective basis to settle disagreements between shareholders or within legal proceedings.
  • Estate and Tax Planning: Essential for estate transfers, donations, or tax declarations involving private shareholdings.
  • Restructuring or Investment: Assists in capital restructuring, investment offers, or issuing new shares to investors.
  • Legal and Regulatory Compliance: Supports decisions and resolutions required under the Companies Act Section 38, by demonstrating fairness and reasonableness.

Share Valuation Methods

We use globally recognised methods to ensure each share valuation is accurate, defensible, and tailored to your specific context. Here’s an overview of some of the main approaches:

1. Net Asset
Value

Used when a company’s value is closely tied to its assets rather than earnings. Common for investment holding companies or asset-heavy businesses.

2. Earnings-Based Valuation

Calculates share value based on the company’s ability to generate future profits. Often uses methods like Price-to-Earnings or maintainable earnings.

3. Discounted Cash Flow (DCF)

Projects future cash flows and discounts them to present value. This method is ideal for established companies with predictable earnings.

4. Market
Approach

Benchmarks your company against comparable businesses or recent transactions. Helpful when good market data is available.

5. Cost-Based
Approach

Used mainly for start-ups or entities with minimal earnings history. It values the business based on the cost to recreate it today, including assets and setup costs.

6. Capitalisation of Earnings

A simplified form of DCF where expected future maintainable earnings are capitalised using a risk-adjusted rate. Often used in medium-sized businesses where future earnings are expected to remain stable.

7. Dividend Discount Model (DDM)

Applied when valuing equity with predictable dividend payouts. Less common in privately held firms but relevant where dividends drive shareholder returns.

8. Rule-of-Thumb or Industry Multiples

In some sectors, especially SMEs, valuation experts may use typical industry multiples (like x times revenue or x times EBITDA) to triangulate value, but always supported by more rigorous methods.

9. Adjusted Book
Value

Popular for asset-intensive or investment-holding companies. The balance sheet is adjusted to reflect fair market value of underlying assets and liabilities.

SARB, LEGAL AND STATUTORY VALUATIONS

This service is aimed at clients who need the opinion of an expert valuer for statutory, regulatory, or legal purposes or for arriving at negotiated settlements of disputes.

Our SARB, Legal and Statutory Valuations experience includes:

  • Expert Witness Services
  • Intellectual Property Valuations
  • Divorce Proceedings
  • Exchange Control Approvals
  • Companies Act Section 38 Requirements
  • Taxation Valuations

To find out more about our these services, get in touch.

Frequently Asked Questions

To value shares in a private company in South Africa, professionals assess the business’s financials, assets, earnings, and market data using accepted valuation methods. Adjustments are made for net debt position, control, restrictions, or minority holdings. An independent valuation ensures compliance with the Companies Act and supports fair, informed transactions.

To calculate share valuation, experts use methods like net asset value, earnings multiples, or discounted cash flow, depending on the company’s profile. The approach is adjusted for share type, control, and liquidity. A professional share valuation ensures accuracy, regulatory compliance, and fair outcomes in transactions or disputes.

Share value refers to the worth of a single share in a company, based on the overall value of the business. It reflects what a shareholder’s stake is worth and can vary depending on financial performance, ownership rights, and market conditions. Accurate share value supports fair transactions and decision-making.

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