Comps and Precedent Transactions

Core

Relative valuation: peer selection, multiples, control premiums, and the football field.

Screen for comparable companies on industry, size, growth, margins and geography. Trading comps use public peers' current multiples such as EV/EBITDA and P/E; precedent transactions use the multiples paid in past acquisitions, which include a control premium and so are usually higher. Choose a range around the median, for example 8.0x to 10.0x, and apply it to the target's EBITDA of 50 for an implied enterprise value of 400 to 500. Subtract net debt of 100 for equity value of 300 to 400, or 15.00 to 20.00 per share on 20 million diluted shares.

Apply at firm

Firm bridges appear here once occurrence signals are published for this topic — directional heat, never answer text.