Hi guys,
I have to perform a transaction multiple for a US railroad company. We have transaction multiple information about three past merger deals in the railroad industry.
The multiples presented are:
P/E , P/B , EV/Sales and EV/Ebitda. We have to decide which multiples are usefull in this industry.
Given high capital intensity and differnces in capital structures I think I should only focus on EV multiples (EV/S and EV/Ebitda). Do you guys agree on this?
Moreover, the projected synergies in % of operating expenses for this merger are projected at 17%. However, the transaction multiples provided are for deals with 20-30% synergies. Is there a way to control for this?
Thank you very much in advance!
EV/EBITDA and P/E. Use both synergized and unsynergized multiples
Thanks! Why only these two multiples?
How can I calculate unsynergized multiples? E.G. synergeries are 22.3% of operating costs. Can I than just divide multiple by 122.3 and multiply by 100 to find unsynergized?
Thank you very much in advance man!
EV / EBITDA - its going to be pretty high. Also look at public comps in addition to transaction comps. There are some publicly traded rail / rail car mfg companies ie RailAmerica.
Thank you very much! Why only the EV/Ebitda? And is there any specific reason to also look at transaction multiples? Since this company is part of a merger, I think I should only look at transaction multiples? It is worth more to the acquirer than to other companies right?
is this for a case study? you said you have info on past rail-related transactions, so assume you have multiples, too?
if you have access, last 10-year EV/EBITDA on its peers would tell you how the industry (in a perfect, including all rail-related companies) has been trending.
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