M&A Leadership Council

JULY 13, 2023

The Art of M&A® / Due Diligence: Precedent Transactions Analysis An excerpt from The Art of M&A, Fifth Edition: A Merger, Acquisition, and Buyout Guide by Alexandra Reed Lajoux Editor’s Note: A growing number of M&A professionals are pursuing the Certified M&A Specialist , or CMAS ® credential.

Precedent Transaction Analysis 52

Precedent Transaction Analysis Comps Mergers & Acquisitions Banking 52

M&A Leadership Council

JULY 13, 2023

The Art of M&A® / Due Diligence: Precedent Transactions Analysis An excerpt from The Art of M&A, Fifth Edition: A Merger, Acquisition, and Buyout Guide by Alexandra Reed Lajoux Editor’s Note: A growing number of M&A professionals are pursuing the Certified M&A Specialist , or CMAS ® credential.

Precedent Transaction Analysis 52

Precedent Transaction Analysis Comps Mergers & Acquisitions Banking 52

Valutico

DECEMBER 15, 2022

Valuations using multiples is one of the three main approaches to valuing a business, sometimes referred to as the ‘market-based approach’. The first is comparable company analysis (CCA), also known as “comps”. The second is precedent transaction analysis, known as “precedents” and also called a comparable transaction analysis (CTA).

Precedent Transaction Analysis 52

Precedent Transaction Analysis EBITDA Comparable Company Analysis Enterprise Value 52

Valutico

DECEMBER 15, 2022

Valuations using multiples is one of the three main approaches to valuing a business, sometimes referred to as the ‘market-based approach’. The first is comparable company analysis (CCA), also known as “comps”. The second is precedent transaction analysis, known as “precedents” and also called a comparable transaction analysis (CTA).

Precedent Transaction Analysis 52

Precedent Transaction Analysis EBITDA Comparable Company Analysis Enterprise Value 52

Equilest

FEBRUARY 24, 2024

Market-Based Business Valuation Formula For a market-based calculation, use: CV = (EBITDA x 1.5) – (Current Liabilities x 0.5) Or V = (EBITDA * 1.3) / (Revenue – COGS) As an example, if a business's EBITDA is $300,000 and current liabilities are $50,000, the calculation would be: ($300,000 x 1.5) - ($50,000 x 0.5) = $425,000.

Business Valuation 40

Business Valuation Discounted Cash Flow Book Value Liquidation Value 40

Valutico

JUNE 13, 2023

Additionally, CCA can be impacted by market volatility and may not reflect changing market conditions or differences in accounting practices between companies. Do you want to find comparable companies for your analysis? Valutico has more than 3TB of market-leading comparable company data covering almost every country.

Comparable Company Analysis 52

Comparable Company Analysis Discounted Cash Flow Precedent Transaction Analysis Private Equity Firm 52

Equilest

OCTOBER 22, 2023

The accuracy of these projections can be influenced by external factors and market conditions, making them inherently uncertain. Overlooks Market Sentiment The DCF method primarily relies on financial metrics and future cash flows. How can investors account for market sentiment when using the DCF method?

Discounted Cash Flow 40

Discounted Cash Flow Business Valuation Precedent Transaction Analysis Finance 40