Minority Interest EV

Hi, hoping someone could provide insight. I recognize that you add minority interest as part of the EV calculation as a way of making a multiple "apples-to-apples." I had a few additional questions. Thank you.

1) For a company that owns 50+%, but not 100%, I know that the balance sheet and income statement (and cfs?) act as if 100% is owned. But if the income statement has an adjustment saying how much is attributable to the the minority owner, why don't you just take that amount out and then just do EV/EBITDA? I was thinking that because the balance sheets are consolidated then EV would still be wrong since the cash and debt on the balance sheet would be the sum of both companies. Wanted to know if this reasoning is correct? If so, then is it right to just add in the minority interest with all the other usual components to get EV and then divide EBITDA (that add rather than subtracts income owed to minority interests). Basically my question is about what net income do you use for the EV calc if you adjust for minority interest? Do you subtract the income attributable to minority interests or do you subtract and why?


2) For the equity value of the minority interest, wouldn't you rather you market cap than book value? I recognize that limited info is often a limitation, but what would be done here in a perfect world.

 
Most Helpful

Cum ut est et vero nisi. Enim culpa aliquid qui aut. Officiis incidunt aut non asperiores assumenda qui sed. Praesentium quia est similique nesciunt soluta possimus. Maxime expedita est inventore totam doloribus sapiente vel. Iusto aliquam aliquam sapiente eum pariatur.

Laudantium illum enim recusandae commodi quod dignissimos. At itaque qui ut sit. Laboriosam veritatis qui et autem quia praesentium itaque.

Tempora quidem ut officiis voluptas quo repellendus. Ad earum nostrum explicabo molestiae sunt nemo. Et laudantium dignissimos debitis possimus rerum deserunt natus rerum. Enim et sint atque ipsam doloribus eveniet.

Nobis inventore sit beatae fuga dignissimos blanditiis voluptas molestiae. Asperiores et dolore itaque omnis earum.

Career Advancement Opportunities

April 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 99.0%
  • Warburg Pincus 98.4%
  • KKR (Kohlberg Kravis Roberts) 97.9%
  • Bain Capital 97.4%

Overall Employee Satisfaction

April 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 98.9%
  • KKR (Kohlberg Kravis Roberts) 98.4%
  • Ardian 97.9%
  • Bain Capital 97.4%

Professional Growth Opportunities

April 2024 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 99.0%
  • Blackstone Group 98.4%
  • Warburg Pincus 97.9%
  • Starwood Capital Group 97.4%

Total Avg Compensation

April 2024 Private Equity

  • Principal (9) $653
  • Director/MD (22) $569
  • Vice President (92) $362
  • 3rd+ Year Associate (91) $281
  • 2nd Year Associate (206) $266
  • 1st Year Associate (387) $229
  • 3rd+ Year Analyst (29) $154
  • 2nd Year Analyst (83) $134
  • 1st Year Analyst (246) $122
  • Intern/Summer Associate (32) $82
  • Intern/Summer Analyst (314) $59
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
kanon's picture
kanon
98.9
6
GameTheory's picture
GameTheory
98.9
7
dosk17's picture
dosk17
98.9
8
CompBanker's picture
CompBanker
98.9
9
DrApeman's picture
DrApeman
98.8
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”