I was asked this question recently, and just replied with a BS answer. How do you determine a true value using comparables when the market is so sluggish....i.e, multiples are depressed. This was an M&A banker working on sell-side advisory work.

You'd look at a historic average stock prices to get to your multiple. This is common in highly cyclical industries... they look at mid-cycle EBITDA multiples. What this means is you have a peak and a trough in a cycle, so you can either take the middle value or you can take the average from peak to trough as your mid-cycle EBITDA and you use that EBITDA for your multiple. Obviously your question in the opposite... its not EBITDA thats depressed, its the stock price or TEV by way of MVE. So in this case you would look at a historic average, maybe 30 or 60 day share price.

Comps in a tough market

Marcus_Halberstram

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