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

January 2015 978-1-62150-045-2 Hardcover, PDF

Heidi P. Walker

Business Valuation Resources, LLC

Transactional databases provide analysts and businesses of all kinds with a wealth of information about the prices of privately held companies. When determining the value of a particular company, transactional databases are one place analysts look to derive indications of the price at which buyers and sellers might converge.

The newly expanded edition of Comprehensive Guide to the Use and Application of Transaction Databases, is the go-to resource for anyone who relies on the market approach. Heidi Walker covers the most popular transaction databases including Pratt’s Stats, BIZCOMPS, S&P Capital IQ, and many more, plus she analyzes rules of thumb, prior transactions, and other market indications of value. 

Highlights of this Guide include:

  • Clear explanations of the differences between the most commonly used transaction databases - 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 handles liabilities
  • Thorough analysis of the most popular and well-regarded transaction databases
  • User friendly format allows easy comparison across databases
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  • INTRODUCTION
    • Putting the Transaction Method in Context
    • Public Companies Versus Private Companies
    • Ways of Estimating Rates of Return
    • Why Use Transactional Databases?
    • Advantages of the Use of Transaction Data
    • Disadvantages of the Use of Transaction Data
    • Databases Included in This Text
  • CHAPTER 1. DEFINING MARKET VALUE MULTIPLES
  • CHAPTER 2. PRATT’S STATS—PRIVATE COMPANY MERGER AND ACQUISITION
    TRANSACTION DATABASE
    • Overview
    • Accessing the Data
    • Sample Transaction Report
    • What Is Included in the Transaction Data?
    • Assets and Liabilities Assumed to Be Transferred in an Asset Sale and a Stock Sale
    • Special Issues Regarding the Use of Pratt’s Stats Data
    • General Steps to Follow When Using Pratt’s Stats Transactions
    • Gathering Pratt’s Stats Transaction Data for the Lawn and Garden Services Industry
    • Gathering Pratt’s Stats Transaction Data for the Commercial Printing Industry
  • CHAPTER 3. PUBLIC STATS—PUBLIC COMPANY MERGERS AND ACQUISITIONS
    TRANSACTION DATABASE
    • Overview
    • Accessing the Data
    • Sample Transaction Report
    • What Is Included in the Transaction Data?
    • Assets and Liabilities Assumed to Be Transferred in an Asset Sale and a Stock Sale
    • Special Issues Regarding Use of Public Stats
    • General Steps to Follow When Using Public Stats
    • Gathering Public Stats Data for Software Industry
  • CHAPTER 4. BIZCOMPS
    • Overview
    • Accessing the Data
    • Sample Transaction Report
    • What Is Included in the Transaction Data?
    • Assets Assumed Transferred by Use of BIZCOMPS Multiples
    • Special Issues Regarding Use of BIZCOMPS Data
    • General Steps to Follow When Using BIZCOMPS Data
    • Gathering BIZCOMPS Transaction Data for the Lawn and Garden Services Industry
  • CHAPTER 5. IBA MARKET DATA
    • Overview
    • Accessing the Data 
    • Sample Transaction Report
    • What Is Included in the Transaction Data?
    • Assets and Liabilities Assumed to Be Transferred
    • Special Issues Regarding Use of IBA Market Data
    • General Steps to Follow When Using IBA Market Data.
    • Gathering IBA Market Data for the Lawn and Garden Services Industry
  • CHAPTER 6. FACTSET’S MERGER AND ACQUISITION DATABASE
    • Overview
    • Accessing the Data
    • Sample Deal Report
    • What Is Included in the Transaction Data?
    • Assets and Liabilities Assumed to Be Transferred in Deals Reported by FactSet
    • Special Issues Regarding Use of FactSet Data.
    • General Steps to Follow When Using FactSet Data
    • Gathering FactSet Deal Report Data for the Commercial Printing Industry
  • CHAPTER 7. DONEDEALS
    • Overview 
    • Accessing the Data 
    • Sample Report
    • What Is Included in the Transaction Data?
    • Assets and Liabilities Assumed to Be Transferred in Deals Reported by DoneDeals
    • Special Issues Regarding Use of DoneDeals Data
    • General Steps to Follow When Using DoneDeals Data
    • Gathering DoneDeals Transaction Data for the Commercial Printing Industry
  • CHAPTER 8. S&P CAPITAL IQ
    • Overview 
    • Accessing the Data 
    • Sample Transaction Report 
    • What Is Included in the Transaction Data?
    • Assets and Liabilities Assumed to Be Transferred in Deals Reported by S&P Capital IQ
    • Special Issues Regarding Use of S&P Capital IQ Data
    • General Steps to Follow When Using S&P Capital IQ
    • Gathering S&P Capital IQ Transaction Data for the Commercial Printing Industry
  • CHAPTER 9. GF DATA
    • Overview
    • Accessing the Data
    • Sample Data
    • Definitions
  • CHAPTER 10. KTMINE
    • Overview
    • Accessing the Data
    • Sample Transaction Report
    • What Is Included in the Transaction Data?
    • General Steps to Follow When Using the Data
    • Gathering Transaction Data for a Valuation Assignment
  • CHAPTER 11. RULES OF THUMB AND PRIOR TRANSACTIONS OF COMPANY STOCK
    • Rules of Thumb
    • Prior Transactions of the Subject Company
  • CHAPTER 12. 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?
    • Growth and Volatility
    • Earnouts
    • Covenants Not to Compete
    • Read the Transaction Report
    • Always Calculate Your Own Multiples
    • Verify Target Business Description and SIC Code
    • Review Deal-Related SEC Filings
    • The Importance of Asset Data
    • Be Careful to Review Valuation Software Output
    • Don’t ‘Cherry-Pick’
  • APPENDIX. COMPARE APPLES TO APPLES: INVESTIGATING THE DIFFERENCES IN TRANSACTIONAL DATABASES
  • IBA vs. BIZCOMPS
  • IBA vs. Pratt’s Stats
  • BIZCOMPS vs. Pratt’s Stats
  • Seller’s Discretionary Earnings (SDE)
  • Stock Sales
  • INDEX