WSP - Transaction Comparables
Study online at https://quizlet.com/_grewbx
1. How do you calcu- Multiply fully diluted shares outstanding (includes options and convertible secu-
late Offer Value? rities) times the offer price (trading price plus a premium)
2. How do you cal- Offer value plus net debt of the target company
culate Transaction
Value?
3. What are some News runs, press releases, company filings (annual and quarterly reports), ana-
common sources lyst reports, data services
of transaction info?
4. Why might one Opportunity for synergies, landmark deal, hostile takeover, or simply not truly
company sell at comparable
a higher multiple
than another?
5. How do you val- Apply an industry average transaction multiple to the private company's relevant
ue private compa- operating metric
nies using transac-
tion comps?
6. What are some of Advantages: Facilitate private company valuation, can reflect real supply and
the demand for specific assets
advantages/disad-
vantages to using Disadvantages: Finding truly comparable transactions, deals and their multiples
transaction comps may be "stale", obtaining transaction information
analysis?
7. Why might a "me- A median multiple will limit distortions from outliers
dian" multiple be
preferred to a
"mean" multiple?
1/2
Study online at https://quizlet.com/_grewbx
1. How do you calcu- Multiply fully diluted shares outstanding (includes options and convertible secu-
late Offer Value? rities) times the offer price (trading price plus a premium)
2. How do you cal- Offer value plus net debt of the target company
culate Transaction
Value?
3. What are some News runs, press releases, company filings (annual and quarterly reports), ana-
common sources lyst reports, data services
of transaction info?
4. Why might one Opportunity for synergies, landmark deal, hostile takeover, or simply not truly
company sell at comparable
a higher multiple
than another?
5. How do you val- Apply an industry average transaction multiple to the private company's relevant
ue private compa- operating metric
nies using transac-
tion comps?
6. What are some of Advantages: Facilitate private company valuation, can reflect real supply and
the demand for specific assets
advantages/disad-
vantages to using Disadvantages: Finding truly comparable transactions, deals and their multiples
transaction comps may be "stale", obtaining transaction information
analysis?
7. Why might a "me- A median multiple will limit distortions from outliers
dian" multiple be
preferred to a
"mean" multiple?
1/2
