Precedent transaction analysis values a business using the multiples that buyers actually paid for similar companies in past M&A deals. Together with DCF and trading comps, it is one of the "big three" valuation methods.
In this guide, Breaking Into Wall Street covers:
- How to find and screen comparable deals, including sources available without a paid database
- Which transaction multiples to use and why they are usually based on historical figures
- The role of the control premium, and why deal multiples often give a wider range of values than other methods
The video is refreshingly candid about the method's limitations, which makes it valuable for business owners benchmarking a sale price and for anyone assessing whether a deal price is reasonable.