How to value a company with an existing business and new ventures

Hi, I’m currently working for a low mid-market private equity fund based out of Southeast Asia.

We have come across multiple companies that have an existing business in their home country (recurring revenue & profitable) with the plan of expanding the business into the neighbouring countries, to the point where the new ventures would effectively make up majority of the value of the future business. Note that these are traditional consumer or software companies that compete with existing competitors within these new markets (albeit some may have lesser competition vs some other countries).

Most of the time, the owner would want to include this “new” venture (with ambitious numbers that are impossible to cross check) into the valuation. I would argue that yes, they do have certain IP and know-how that would enable them to compete in this new market, but at the same time, why should I be paying something that has yet to produce any numbers.

How would you usually value and structure these kinds of transactions? I would think that the ideal structure would be to value the existing business with incentives in place once management achieves certain KPIs for the new venture. What kind of incentive would it be? E.g. NPV of the new business if management achieves certain KPI that is agreed within the forecast?

Any inputs would be greatly appreciated. And let’s just assume there are no competing bids for this target. Thanks!