Valuation Pricing: Questions We Should Ask Ourselves

• What are similar companies selling for (similar customer profiles and product offerings)?
  – Private and public sales transactions
  – Peer group of publicly traded companies
  – What multiples of revenue, EBITDA are they trading at?
  
  
• Where is the industry heading? growth, decline, stable
  – It is all about creating demand for the subject company’s products/services
  
  
• What multiples of revenue and/or EBITDA should the subject company command based on revenue size or asset base?
  
  
• Strengths: could result in a higher price or multiple to seller
  – Superior historical performance
  – Great management team
  – Excellent growth potential
  
  
• Weaknesses: could result in a lower price or multiple to seller
  – Lack luster historical performance
  – Weak management team
  – Low growth potential
  – Riskier investment