Global BV News: Higher multiples for cross-border vs. domestic buyouts per new study

BVWireIssue #215-2
August 12, 2020

global business valuation
international business valuation, mergers and acquisitions (M&A), private equity

An analysis of over 1,000 global private equity transactions reveals that cross-border buyouts are associated with significantly higher valuation multiples than domestic ones, says a new study. The authors attribute this finding to informational disadvantages of foreign acquirers.

They also find that, consistent with this idea, “the spread in valuation multiples becomes smaller when the target operates in a country with high accounting standards, when it was publicly listed prior to the buyout, and when information production is facilitated due to large firm size.” The study, “Cross-Border Buyout Pricing,” is available if you click here.

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