What is precedent transactions analysis and what is the core idea behind it?

Precedent transactions (a.k.a. transaction comps or M&A comps) value a company based on multiples paid in past acquisitions of similar companies. The core idea: a buyer recently paid X times EBITDA (or another metric) to acquire a comparable business in a comparable deal, so a similar business should be worth a similar multiple in an acquisition context. Because these are control acquisitions, the multiples embed a control premium and deal-specific synergies, so they typically sit ABOVE trading comps. The output is an implied valuation range, and it is the standard 'what would someone pay to buy the whole company' benchmark.