Appropriate royalty rate for a car rental business in Brazil

Comparable Brand Royalty Rates and Brand Valuation – CS Brasil Frotas Ltda. (CS Frotas) was recently merged into Movida, a listed company in Brazil. On this occasion, the value of the shares of CS Participacoes needed to be determined, and the valuation report of Apsis Consultoria has been released to the public stakeholders.

CS Frotas is a fleet management business in Brazil for public sector clients, focused on the rental of light vehicles. Lease contracts have durations between one and five years. With a fleet of 17.300 vehicles and 22 stations throughout the country, CS Frotas is the sixth largest car rental in Brazil.

For the valuation of CS Frotas, Apsis performed – among other – a valuation of the CS Frotas brand name. The appropriate royalty rate was determined to be 0.4%, based on comparable royalty rate data from MARKABLES. For the full version of the valuation report, please click here.