The Comprehensive Guide to the Use and Application of Transaction Databases, Fourth Edition

May 2020 Hardcover, PDF

Alina Niculita

Business Valuation Resources, LLC

PLEASE NOTE: The PDF edition is now available. The print edition will ship in late June.

Edited by esteemed BV practitioner Alina Niculita, ASA, CFA, MBA and now in its 4th edition, The Comprehensive Guide to the Use and Application of Transaction Databases has become the most trusted source for details on every transaction set available to the valuation profession for use in the market approach.

This comprehensive guide covers the most popular transaction databases and accounts for resources that have come to market including DealsStats, BIZCOMPS, ValuSource, DoneDeals, Tagnifi, S&P Capital IQ, and many more. In addition, the author analyzes rules of thumb, prior transactions, and other market indications of value and the guide includes more screen shots and details than previous editions.You’ll want to keep a copy of this one close at hand for daily reference!

Highlights of this Guide include:

  • Clear explanations of the differences between the most commonly used transaction databases and platforms - and how to avoid common traps
  • Key concepts in applying valuation multiples, most notably invested capital versus equity (and related pricing multiples) and how each of the databases and platforms handles liabilities
  • Deep dive into expanded platforms such as DealStats from BVR
  • User friendly format allows easy comparison across databases and platforms
This publication and many more are also available for download with a subscription to the Digital Library or BVResearch Pro.
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Table of Contents

Introduction
Putting the Transaction Method in Context
Public Companies Versus Private Companies
Ways of Estimating Rates of Return and Multiples
Why Use Transaction Databases?
Advantages of the Use of Transaction Data
Disadvantages of the Use of Transaction Data
A Word on the Market Approach to Business Valuation
Databases Included in This Text

Chapter 1. Defining Market Value Multiples


Chapter 2. DealStats—Private- and Public-Company Merger and Acquisition Transaction Database

1. Overview
2. Accessing the Data
3. Sample Transaction Report
4. What Is Included in the Transaction Data?
5. Assets and Liabilities Assumed to Be Transferred in an Asset Sale and a Stock Sale
6. Special Issues Regarding the Use of DealStats Data
7. General Steps to Follow When Using DealStats Transactions
8a. Gathering DealStats Transaction Data for the Lawn and Garden Services Industry
8b. Gathering DealStats Transaction Data for the Commercial Printing Industry

Chapter 3. BIZCOMPS

1. Overview
2. Accessing the Data
3. Sample Transaction Report
4. What Is Included in the Transaction Data?
5. Assets Assumed Transferred by Use of BIZCOMPS Multiples
6. Special Issues Regarding Use of BIZCOMPS Data
7. General Steps to Follow When Using BIZCOMPS Data
8. Gathering BIZCOMPS Transaction Data for the Lawn and Garden Services Industry

Chapter 4. ValuSource Market Comps(Formerly IBA Market Data)

1. Overview
2. Accessing the Data
3. Sample Transaction Report
4. What Is Included in the Transaction Data?
5. Assets and Liabilities Assumed to Be Transferred
6. Special Issues Regarding Use of ValuSource Market Comps
7. General Steps to Follow When Using ValuSource Market Comps
8. Gathering ValuSource Market Comps for the Lawn and Garden Services Industry

Chapter 5. FactSet’s Merger and Acquisition Database

1. Overview
2. Accessing the Data
3. Sample Deal Report
4. What Is Included in the Transaction Data?
5. Assets and Liabilities Assumed to Be Transferred in Deals FactSet Reports
6. Special Issues Regarding Use of FactSet Data
7. General Steps to Follow When Using FactSet Data
8. Gathering FactSet Deal Report Data for the Commercial Printing Industry

Chapter 6. DoneDeals

1. Overview
2. Accessing the Data
3. Sample Report
4. What Is Included in the Transaction Data?
5. Assets and Liabilities Assumed to Be Transferred in Deals Reported by DoneDeals
6. Special Issues Regarding Use of DoneDeals Data
7. General Steps to Follow When Using DoneDeals Data
8. GatheringDoneDeals Transaction Data for the Commercial Printing Industry

Chapter 7. S&P Capital IQ

1. Overview
2. Accessing the Data
3. Sample Transaction Report
4. What Is Included in the Transaction Data?
5. Assets and Liabilities Assumed to Be Transferred in Deals Reported by S&P Capital IQ
6. Special Issues Regarding Use of S&P Capital IQ Data
7. General Steps to Follow When Using S&P Capital IQ
8. Gathering S&P Capital IQ Transaction Data for the Commercial Printing Industry

Chapter 8. GF Data

1. Overview
2. Accessing the Data
3. Sample Data
4. Definitions

Chapter 9. MergerShark

1. Overview
2. Accessing the Data
3. Sample Transaction Reports
4. What Is the Search Criteria for the Merger and Acquisition Transaction Data?
5. What Is Included in the Merger and Acquisition Transaction Data?
6. What Is the Source of the Data Included in the Database?
7. What Other Types of Data Are Included in the Database?
8. Special Issues Regarding the Use of MergerShark

Chapter 10. TagniFi

1. Overview
2. Accessing the Data
3. What Is Included in the Transaction Data?

Chapter 11. ValuSource M&A Comps

1. Overview

Chapter 12. Rules of Thumb, Prior Transactions of Company Stock, and Offers to Buy

Rules of Thumb
Prior Transactions of the Subject Company
Offers to Buy of the Subject Company

Chapter 13. Common Errors and Issues in the Application of Transaction Data

Introduction
Reporting Differences
Liabilities Assumed
Broaden the Search
Applying the Multiple: To What Measure of Historical or Future Results?
Volatility and Growth
Earnouts
Covenants Not to Compete
Read the Transaction Report
Always Calculate Your Own Multiples
Verify Target Business Description and SIC and/or NAICS Code
Review Deal-Related SEC Filings
The Importance of Asset Data
Be Careful to Review Valuation Software Output
Don’t ‘Cherry-Pick’

Appendix I. Compare Apples to Apples: Investigating the Differences in Transactional Databases

ValuSource Market Comps vs. BIZCOMPS
ValuSource vs. DealStats
BIZCOMPS vs. DealStats
Recommended Adjustments to Selling Price
Recommended Adjustments to SDE
Other Considerations

Appendix II. Debate Over Analysis of Transaction Databases

Counterpoint to ‘Tatum’s Law of Market Multiples’
In Defense of Tatum’s Law of Market Multiples
Letter to the Editor: Comments on an Article on the Use of Statistics in the Transaction Method
Letter to the Editor: Comments on an Article on the Use of Statistics in the Transaction Method
Letter to the Editor: Comments on an Article on the Number of Transactions for the GCTM
Letter to the Editor: Comments on Adequate Sample Size in the Transaction Method

Look Inside the Guide

Transaction Databases Guide