Football Field Case Study - Transaction Comparables Summary
- 01:31
How to do a valuation of a company using transaction multiples based on a short list of comparable deals. Calculate the minimum and maximum acquisition range and compare it with the DCF and trading comps ranges.
Transcript
Then I want to do the transaction multiples, and this is just going to be at the minimum based on the summary at the bottom. Do you remember we did a short list? So I'm gonna go and get the minimum EBITDA multiple. This is by definition an LTM EBITDA multiple because it's a transaction comparable, it's historical. And then I'm going to do the maximum of the same range again. And I get a pretty enormous range here between 15.9 and 24.7. But you sometimes get this with transaction comps. So I'm gonna go up and get my LTM EBITDA and multiply that by the multiple. And actually what I should have done is absolutely reference that. Because then I can just copy that, right? So in our transaction comps, we are seeing that we've got an acquisition range, which is actually below our DCF range, which is kind of unusual, but actually it's because the equity markets have improved significantly since the transaction comps and probably the outlook as well. So you can see, based on our trading comps, again, we are getting higher values than the transaction comps, but that's simply because the multiples in the markets have improved so much since some of those deals were done.