Precedent Transaction Analysis: The Full Guide and Excel Examples

[@VinaySingh-rv1mq]

Thanks Brian for this valuation method, definitely clear some unknown facts about it

[@financialmodeling]

Thanks for watching!

[@kesyaagnesmaria1441]

Thank you for sharing. Really appreciate it, Sir.

[@financialmodeling]

Thanks for watching!

[@alexandralyu836]

Thanks for sharing, Brian!

[@financialmodeling]

Thanks for watching!

[@saralyn4062]

This was so helpful- thank you

[@financialmodeling]

Thanks for watching!

[@pedropacheco9608]

I love you Brian. May God bless you!

[@financialmodeling]

Thanks for watching!

[@quintondouse7237]

Hey Brian, hope you are doing well. I have a question for you regarding the specific multiple that should be used for valuing a private company in an LBO scenario. If you're tasked with finding the entry multiple to pay for LTM EBITDA for a private company and you're given an output of comps (trading or precedents), should you always use the median multiple?

[@financialmodeling]

You could use higher or lower multiples (e.g., 25th or 75th percentile) if the company is performing better/worse than the median of the set. But you would need some pretty good justification for this because most people just expect to see the median used.

[@xZypEi]

Thanks Brian! I have had a job interview for an M&A Manager role in a European corporate and was asked about the downsides of precedent transactions. Great to see that I was actually doing pretty well. I have also mentioned that the multiple might depend on the type of company the acquirer is, i.e. PE or corporate (assuming that a corporate would pay more due to synergies and a PE would pay less since it might be a restructuring case). Thanks to your videos, I was invited to a second round (a case study). Let's see what comes next! Do you have any ideas what they could ask?

[@financialmodeling]

Congrats. Second rounds are usually more of the same, but the selection process depends heavily on culture/fit since most people will be fairly capable technically by that point.

[@xZypEi]

@@financialmodeling thanks! I was just wondering because they said it's going to be a case study (and I have never been into case studies before)

[@sonerguney3225]

Very good. Can we have the excel file for a download.

[@financialmodeling]

breakingintowallstreet.com/kb/valuation/precedent-transaction-analysis/ --> "Files & Resources"

[@aleksandramisiaszek3111]

Hi! Is there any way we could value a company without knowing how many diluted shares they have?

[@financialmodeling]

You could just use the basic share count.

[@brenaj4891]

any good alternative for capitalIQ? preferrably free

[@financialmodeling]

Finviz is good for screening public companies.

[@SebastianRocks1234]

I am following, I am not sure what to do after I get the transactions on capitaliq. Can anyone please help? I understand what to do, but I want to find the multiple myself.

[@financialmodeling]

I don't understand your question. If you use Capital IQ to find the transactions, all the multiples should be listed there (???).

[@financialmodeling]

For all the files and resources and a written version, please go to: breakingintowallstreet.com/kb/valuation/precedent-transaction-analysis/