Hey everybody. Have a friend I met a while back who owns a private trucking / container shipping business. He asked me if I would be able to help him value it to sell. Being the eager person I am I told him I would be happy to help. Have only done a couple DCF's in my day back in college which were on public companies.
Does anybody on here have DCF shells for private businesses? Also what if the business has negative cash flow? I know these are questions I am going to research more on my own but any insight would be greatly appreciated. I couldn't pass up the opportunity to help sell a business for what the owner thinks is worth $17mm.
Silver bananas for anybody willing to provide some insight / any type of shell used to value a private company which may or may not have negative cash flow (haven't seen the books yet). Thanks!
You haven't given much info on the business, but my first thought would be that the value of such a business is unlikely to be dramatically different than net asset value. Given the complexity and need for long-term judgments inherent in building a DCF, if you can get a more solid ballpark via something more concrete you'd rather fly with that.
Gotcha, honestly don't have a lot of info yet, I will try to post updates here as I get them, I appreciate it
Sometimes you can just apply an EBITDA multiple and call it a day. But obviously that multiple can't come from out your ass, so you need to research similar deals and see what their "take-out" multiples were. It's gonna be tough since this is a private company, but there should be databases out there in which you can subscribe to for past deal info.
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