Nov 21, 2012

EBITDA Multiple Basic Question

If I know a company was acquired for 8x TTM EBITDA recently, does this mean that the company's equity was purchased for 8x TTM EBITDA, or does the 8x refer to the company's EV, from which I'd need to back out the debt and cash to arrive at the price paid for the equity?

Many thanks!

197 WSO Academy Hedge Fund Session Reviews: 4.78/5

Class of '29 Sep 2026 Cohort

5.00/5

Hedge Fund LinkedIn Review

“My meeting with Kevin Lee was super helpful and went well beyond what I originally expected. We met to discuss my LinkedIn profile, but the conversation also covered the hedge fund space and how I’m thinking about my career as a whole. I really appreciated being able to talk about both how I present myself professionally and the broader direction I want to take. As someone interested in hedge funds but also exploring other paths in finance, it was helpful to have a conversation that connected my profile to my actual interests and goals. Kevin gave me a lot to think about, and I left feeling clearer about my next steps. Overall, I really appreciated his time and willingness to go beyond the original purpose of our meeting.”

Class of '26 Sep 2026 Cohort

4.56/5

Hedge Fund Mock Interview

“He was very responsive and prepared for the meeting. He actually read the JD, resume, and looked up linkedin which sometimes other mentors doesn't actually go over those to prepare things beforehand. I appreciate his direct comments I think it saved time and actually helped me to know exactly where to improve. I also appreciated him admitting if he doesn't know about specific HF strategy. Only thing I'd suggest for him is probably sending actionable key takeaways after the meeting because other mentors did and that was very helpful. ”

See All 11,412 WSO Academy Reviews

9 Comments

Asatar

13y

On the face of it I'd assume 8x EV. The capital structure of basic equity doesn't really equate to EBITDA.

Quote

Report

Other

See my other WSO blog posts>

esbanker

13y

an EBITDA multiple corresponds to a company's enterprise value

Quote

Report

Other

Capitalist

Marginofsafety

13y

8x is the EV. back out the debt part of the capital structure to get to equity value.

Quote

Report

Other

Authored by: Certified Private Equity Professional - 1st Year AssociateCertified Private Equity Pro

John10

13y

Yea, I agree with the guys that posted above. At the risk of beating a dead horse. If they had preffered shares, and pensions as well, these should also be taken off the EV to get to common equity value

Quote

Report

Other

Be nice to those in distress, you could just as easily be in their shoes

Kenny_Powers_CFA

13y

Acquisition multiples should always be EV.

Quote

Report

Other

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

mhurricane

13y

Multiply ebitda by 8, this gives you the implied enterprise value of the transaction. Net out debt (net), minority interest, etc to arrive at equity value. Lol, dead horse.

Quote

Report

Other

The difference between successful people and others is largely a habit - a controlled habit of doing every task better, faster and more efficiently.

SonnyZH

13y

EV/EBITDA, hence you'd be referring back to the enterprise value.

Quote

Report

Other

[quote]The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.[/quote]

ucmaroon47

13y

SonnyZHEV/EBITDA, hence you'd be referring back to the enterprise value.

Quote

Report

Other

And so it goes

therealweinstein

13y

Debitis nostrum sed suscipit est inventore ullam. Hic rerum explicabo soluta nemo omnis. Quasi et quia quas voluptatum. Quae laboriosam vel itaque ducimus. Optio sed eligendi accusamus architecto necessitatibus. Eaque ut voluptas deserunt.

Animi odit odit debitis quo architecto perspiciatis. Autem eum earum quam totam repellat mollitia quia. Sit quo quasi maxime est consectetur ullam quos. Sit minima sit eveniet optio. Voluptatem accusamus ad non quis ad. Dignissimos est eveniet quae eos magnam. Doloremque non rerum inventore iste eaque impedit.

Doloremque repellat aliquam error minus dolores sequi officia. Aliquam quidem exercitationem labore quia vel officia numquam aut. Harum quibusdam omnis neque autem.

Quote

Report

Other

+49	Is the grass really greener? (LSD millions SM Senior Analyst hopping to C/M/BALY/P72)	18	1d
+32	Want out - next steps	10	1h
+30	Distressed Debt the most right-tail outcome?	16	23h
+17	Disillusioned - what to do	4	1d
+12	CorpDev -> HF?	3	3d
+9	Confused on all the HF fee jargon	1	4d
+6	Ultramarathon/ intense running in HF?	2	2d
+6	HH in London	1	16h
+2	Recent unwinds	5	4d
+1	Timing from Superday to offer	1	1d

1	redever	99.2
2	BankonBanking	99.0
3	kanon	99.0
4	Secyh62	99.0
5	GameTheory	98.9
6	dosk17	98.9
7	DrApeman	98.9
8	CompBanker	98.9
9	Betsy Massar	98.9
10	Linda Abraham	98.8

Elite Career Bootcamp. Top Job Offer Guaranteed.

Elite Career Bootcamp. Top Job Offer Guaranteed.

EBITDA Multiple Basic Question

Score Breakdown

Feedback

Score Breakdown

Feedback

Elite Career Bootcamp. Top Job Offer Guaranteed.

Elite Career Bootcamp. Top Job Offer Guaranteed.

EBITDA Multiple Basic Question

See All Comments - 100% Free

Trending Content - Hedge Fund Forum