Valuation: Comps & Precedents
A precedent transaction closed in a frothy M&A market two years ago at 14x EBITDA, but markets have since corrected sharply. How do you treat it in your analysis?
Model answer
Flag it as a less-comparable, environment-distorted data point. The 14x reflects peak credit availability and competitive sponsor bidding that no longer exist, so it likely overstates what a buyer…
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