Unconsolidated investments - EBITDA mult
I'm looking to value a company that owns 50% in a smaller entity. The larger company books equity in affiliates on its P&L, which comes below the EBITDA line. Given that the value of the investment is not on the larger company's books, what is the proper way to adjust for this, or is adjustment necessary?
My opinion is to add the value of the investment to TEV, and then add the post-tax equity in earnings of affiliates. This way both include the effects of the investment.
Any suggestions?