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Valuation

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Valuation

M&A involves using more than one valuation technique to arrive at a valuation that we think is fair. The most common techniques used are:

➢ Comparable Publicly traded companies (“Public Comps”) – this analysis indicates how the stock markets are valuing companies that are similar to the target

➢ Precedent Comparable Transaction analysis (“Transaction Comps”) – this analysis indicates the valuations at which prior M&A transactions have been done in the same industry as that of the target.

➢ DCF analysis – is one of the most important valuation techniques

➢ Sum-of-the-parts analysis – If a target has more than one lines of business, the financial advisor will value each business separately. Therefore, each “part” might have its own Public Comps, Transaction comps and DCF (with different WACCs for each part). The total value is the sum of the parts

➢ Other –depending on the unique characteristics of the transaction, financial advisors will perform a number of other analyses to arrive at fair value like Leveraged Buyout (“LBO”) Analysis, Historical Exchange Ration analyses etc.

Valuation

M&A involves using more than one valuation technique to arrive at a valuation that we think is fair. The most common techniques used are:

➢ Comparable Publicly traded companies (“Public Comps”) – this analysis indicates how the stock markets are valuing companies that are similar to the target

➢ Precedent Comparable Transaction analysis (“Transaction Comps”) – this analysis indicates the valuations at which prior M&A transactions have been done in the same industry as that of the target.

➢ DCF analysis – is one of the most important valuation techniques

➢ Sum-of-the-parts analysis – If a target has more than one lines of business, the financial advisor will value each business separately. Therefore, each “part” might have

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