Valuation: Comps & Precedents
Quick mental math: a target has $50m of EBITDA. Comps trade at a median of 10x with a 25th-75th range of 8x-12x. The target is net cash $30m. What's the implied equity value range?
Model answer
Implied EV range = EBITDA x multiple = $50m x 8x to 12x = $400m to $600m (median 10x => $500m). Bridge EV to equity: equity value = EV - net debt. With net cash of $30m, net debt is -$30m, so equity…
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