When to Use Industry-Specific Valuation Multiples for Business Valuation

Here are some instances when using Industry Valuation Multiples for valuing your company are appropriate

  1. There is an adequate number of comparative companies and/ex transactions to determine a value multiple.
  2. If comparative public companies will be used, there is adequate data on the comparatives to allow the consultant to make appropriate analyses and adjustment.
  3. If comparative transactions will be used, there is adequate data (e.g., terms of sales, asset sale vs. stock sale) on the comparatives to allow the consultant to make appropriate analyses and adjustments.
  4. The valuation is lex Federal income tax purposes (estate and gilt taxes, charitable contributions, ESOPs, etc.).
  5. The company being valued is considering going public.

NOTE: Generally, consultants should perform a search for comparative company data on each engagement.


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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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