How do PE firms value their targets if financials arn't disclosed
Even something as simple as earnings-multiple valuation still requires EBITA, so how would PE firms value a potential target when the company doesn't disclose earnings such as EBITA or any financial information at all for that matter.
Im not talking about VC, but large, long established privately held companies, where presumably you would need a pretty precise valuation based on actual earnings versus the rough valuations usually reserved for start-up's such as FB or Linked-in.
Would this company simply not be considered a target in the first place because financial information is held so tightly?





They will reach out to
They will reach out to companies that appear to be a fit for their strategy and speak with the ownership to get that information from them directly. If the owners are open to acquisition they would enter a CA and send over audited financials.
Usually starts off on verbal figures and if it looks promisign they will engage in all that due diligence, just like a normal public company.
We've got half a million shares in the bag!
Direct contact with
Direct contact with management occurs but generally for well established private companies, investment bankers are constantly pitching acquisitions to management and making introductions with interested players even in the absence of a full blown M&A process. Peak's description is correct and constitutes cold-calling (to the extent that the PE shop does not have existing relationships with company management).
Thanks guys. Excellent info.
Thanks guys. Excellent info. You'd be surprised how impossible these answers are to find using google etc.
Yeah, if a bank is running it
Yeah, if a bank is running it they will have a CIM and hopefully a solid dataroom set up.
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