Exciting news from the Valuation Advisors Lack of Marketability Discount Study: We’ve just added 1,150 new deals to the database, including—for the first time—757 international transactions from 26 countries, with a median revenue of $44 million. China tops the list of new foreign transactions, followed by Israel, the United Kingdom and Canada.
This most-trusted DLOM database now includes 8,550+ transactions in pre-IPO private stock and options. Also as a reminder, the database includes more than 2,410 transactions where the pre-IPO timeframe is 2 years or longer, giving appraisers another source to use in determining a DLOM based on the likely timeframe to liquidity. To learn more about the implications of longer timeframes to liquidity and how to best use the database to determine discounts, click here.
Digging deeper into the data, “although we haven’t statistically analyzed the relationship between U.S. and international DLOMs,” says Brian Pearson, president of Valuation Advisors, the general trend appears to parallel results from the domestic data; that is, “the international discounts tend to increase over time from the IPO date,” he says. Predictably, analysts will want to use the international data when valuing international companies or a company that has a considerable portion of its sales, earnings, or operations overseas, using new tools that permit searches by aggregate or individual country, in addition to the existing search parameters for U.S. companies.
At the same time, “If you are trying to calculate discounts by industry or for a particular time period only, you may want to use all the companies (foreign and domestic) in the database,” Pearson suggests, noting that with nearly 9,000 transactions—2,487 added this year alone—Valuation Advisors is currently the “largest valuation discount database in the world.”