Assume you are performing a comparable company analysis for a pending acquisition. You are advising the target company and the target company is a privately held S corporation. The comparable company acquisitions, for which you have data, are exclusively taxable acquisitions of freestanding C corporations.
Your assistant has computed the following common valuation benchmarks for the comparable company acquisitions.
Further assume that the target company is considered similar to the comparable companies in terms of revenue and profitability prospects— that is, the target company is about the same as the comparables in terms of operations.
Would you recommend any adjustments to the comparable company analyses or would you tell your client to accept an acquirer’s offer that is equal to the average price to EBITDA of the comparable ­company acquisitions?

  • CreatedAugust 06, 2015
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