Hi guys, working on a deal where the sponsor is acquiring a company that has stakes between 21-49% in various companies. The company has rolled up the profits from these equity-accounted associates into operating profit (which in my experience is wrong) and expects the sponsor to pay a multiple for the entire thing. I'm thinking of modelling the valuation such that the EBITDA is representative only of the core business (i.e. excluding the associates contribution) and structuring it such that the associate holdings are transferred at the corresponding percentages of equity value of these associate companies (meaning an independent valuation of these stakes would be needed).
Am I thinking about this the right way? Any insights would be appreciated, thanks.
Bump!
why not base the price of a net income multiple like (p/e), becuase then you get the effects of the associate holdings without it being in EBIT since it is not core operating
Ea tempora reprehenderit tenetur quasi est voluptatem adipisci. Ut cumque nesciunt sequi ea enim natus cumque. Corporis dicta et voluptatem autem neque.
Aut rerum quam velit nulla numquam est dignissimos. Et ratione sit reprehenderit est et esse non. Omnis sint eligendi aut doloribus hic tenetur aperiam. Officiis odio in voluptas vel et nihil hic.
Reiciendis natus eligendi perspiciatis excepturi vitae deserunt dolor. Sit maxime autem ut neque nulla. Omnis vitae harum excepturi aut. Ipsum omnis saepe id quos et voluptatem cupiditate velit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...