Technical Question - Deal Comps / Multiples
Is it accurate / standard to mix and match all cash and all (or part) stock deals in a list of deal comps? Won't the stock-for-stock deals, often struck at lower premiums (reflecting the fact that the target is participating in whatever value gets created from the combination), yield multiples that aren't comparable to all cash deals?
How do people treat these? Exclude the stock deals from the mean/median, normalize them somehow?
I haven't looked at stock-for-stock deals so can't confirm if your assessment is correct in practice, but if you are right, you would either exclude them or footnote as such.
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