Reliable Valuations for Small and Medium Enterprise: M&A Methods Win

BVResearch Pro
Training Event Transcripts
February 11, 2021
James Lisi
market approach
goodwill, income approach, mergers and acquisitions (M&A), USPAP, asset value, cash flow, market approach, growth rate, enterprise value (MVIC), capital asset pricing model (CAPM), investment value, earnings before interest, taxes, depreciation, amortization (EBITDA), balance sheet, guideline transaction method, industry risk adjustment, dealstats


If you have been involved in an M&A transaction and seen how different the M&A model is from the buildup method with public data, have you ever wondered why the M&A model isn’t a key valuation approach or wondered how M&A data differ in character from public market data? In this seminar, Jim Lisi explains why the M&A model with private data is the more reliable approach. The difference between deal data for whole companies and the public markets is explained with Shannon Pratt’s concepts. In the valuation models, just as deals are constructed, the valuation problem is broken into two parts: a value for the operating assets and a value for the nonoperating assets. Similarly, operating cash flows are differentiated from invested capital cash flows, and a central tendency of value will be found using both the market approach and capitalization rates. Then, the two most important financial factors for specific company risk are evaluated, along with discussion of what to do with the nonfinancial factors.
Reliable Valuations for Small and Medium Enterprise: M&A Methods Win
PDF, Size: 1,066 KB