Where can I find precedent transaction multiples?

Where can I find precedent transaction multiples?

Where to find about Precedent Transactions?

• Securities Data Corporation (SDC)
• Equity research reports.
• Annual Reports, 10K, 8K.
• Dealogic / M&A Global.
• Bloomberg.
• Thomson One Banker.
• Capital IQ or FactSet or Merger Market.

Where can I find precedent transactions?

Precedent traction analysis is also known as “M&A comps.” Data sources for precedent transaction analysis include the Securities Data Corporation, which is a repository of mergers and acquisitions data. Trade publications, research reports, and annual filings are also good sources of data.

Where can I find transaction comparables?

The most common approach is to review several sources. These include: The M&A database of a data provider such as Factset or Bloomberg which allows screening using multiple search criteria. Research reports for the sector may provide details of transactions.

How do you find the precedent transactions on Capital IQ?

Use Capital IQ to browse recent deals or search for transactions:

1. Browse: Mouse over the Markets tab and select an industry. Scroll down to browse recent transactions.
2. Search: Mouse over the Screening tab. Select Transactions to perform a search.

How do you find transaction multiples?

It is calculated by dividing enterprise value by annual sales of the company i.e. (Current Market Cap + Debt + Minority Interest + preferred shares – cash)/Revenueread more is 1X to 3X. EV/EBIT: This is another acquisition multiple that investors and financial analysts use.

How far back should precedent transactions go?

Information Sources – Selecting Relevant Transactions A typical SDC run will look back 3-5 years, although a longer or shorter times period may be appropriate.

How do you find the value of comps?

How to Do Comparable Company Analysis: The Process

1. Step 1: Select an appropriate set of comparable public companies.
2. Step 2: Determine the metrics and multiples you want to use.
3. Step 3: Calculate the metrics and multiples for all the companies.

What is precedent transaction?

Precedent transaction method of analysis uses the data from past transactions of a company or business to estimate the valuation of its current assets. Investors can undertake such a process to acquire the following details regarding their impending deal –

What do you mean by precedent transaction comps?

Precedent transaction analysis is a method of company valuationValuation MethodsWhen valuing a company as a going concern there are three main valuation methods used: DCF analysis, comparable companies, and precedent transactions where past M&A transactions. Learn how mergers and acquisitions and deals are completed.

How do you select a precedent transaction?

Selecting the Appropriate Precedent Transactions

1. Same business & industry.
2. Similar business size.
3. Similar sales growth rates and profitability margins.
4. Similar capital structure.
5. Similar reasons for transaction (e.g. fire sale, bankruptcy, or strategic motive).
6. Same geographic location of operations.

What is transaction value M&A?

Total Enterprise Value (TEV) is the gross market value of a company and is synonymous with the transaction value of an M&A deal. Absent a transaction, TEV is often calculated by estimating multiples based on valuations of comparable publicly traded companies or similar private company transactions.

How is EV calculated?

Enterprise value calculates the potential cost to acquire a business based on the company’s capital structure. To calculate enterprise value, take current shareholder price—for a public company, that’s market capitalization. Add outstanding debt and then subtract available cash.

What’s the difference between comps and precedent transaction analysis?

Comparable Company Analysis vs. Precedent Transaction Analysis Both methods are a form of relative valuation, where the company in question is being compared to other businesses to derive its value. However, “comps” are current multiples

How are precedent transactions used in M & A analysis?

Precedent Transactions Analysis, also called “M&A Comps” or “Comparable Transactions,” uses the prices paid for comparable companies in the past to gauge the valuation of the current transaction. It also gives an estimate of the implied stock price in case of an acquisition.

How is a precedent transaction different from an acquisition?

Precedent transaction assumes that given the same circumstances, the value of the company you are analyzing is about the same as the acquisition value of a company that was recently acquired. Instead of using market values, the analyst uses acquisition values.

How to find a relevant set of precedent transactions?

The best way to get a relevant set of Precedent M&A transactions is to go to one relevant example transaction and search for the Fairness Opinion filed in a target company’s Merger Proxy (filed with the SEC under Form S-4).