M&A Comparables for Precedent Transactions
What database do you guys use? At my bank, we only have Cap IQ and Dealogic (Don't have M&A analytics module) and at least in Cap IQ you find deals but get NAs for all the multiples and without multiples it is useless.
What program and methodology do you guys use for this? I tried MergerMarket but that thing is so non-user friendly and non-customizable that I found it very limited for pitchbook making.
Does anyone have experience with SDC Platinum? Does that give M&A deal multiples?
Valuation multiples: Mergers and Acquisitions Data
The precedent transaction analysis looks at premiums paid for companies acquired. These companies are similar to the target company. The multiples can then be used to determine a market value post-acquisition for the target company. Additionally, the analysis is more useful if the past deals reflect the target company. Therefore the valuation multiples used in past acquisitions is a key piece of data.
Searching for Multiples
Casting a broad net and sifting through the details is best when using Cap IQ. Some users even suggest setting EV/EBITDA > 0 (or other multiple) to only show deals with multiples.
duffmt6 - Investment Banking AssociateIf you are having issues finding multiples then you probably just need to broaden your search - in highly fragmented industries or industries with heavy PE involvement, there simply won't be many deal multiples that have been disclosed.
The consensus is that MergerMarket is the best source for the acquisition price. However, the user interface has been problematic for many users. You can also look at SEC Filings.
ibankerben - Investment Banking AssociateAnother source is fairness opinions from public-to-public and public-to-private transactions within the same industry.
Another method for finding similar deals for Precedent Transactions is finding old pitch-books from your bank. As suggested by user @kalga", an investment banking analyst.
kalga - Investment Banking AnalystI would look at old books that your bank has done and use a similar methodology as every industry has thier own idea of what is a good comp. My experience is limited to O&G but I usually pick each transaction based on asset composition, geographical location or geological formation.
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For Capital IQ, just set a parameter for EV/EBITDA > 0 to get only deals with multiples. I also look at former deals on the shared drive if I remember them or do a quick search on LCD.
I use CapIQ and it is fine. If you are having issues finding multiples then you probably just need to broaden your search - in highly fragmented industries or industries with heavy PE involvement, there simply won't be many deal multiples that have been disclosed. You just need to get creative and/or do some research above and beyond CapIQ.
this
Mergermarket for the acquisition Price and CapitalIQ / Factset for LTM EBITDA plus doing some research. It is always a pain
Mergermarket is a life saver. It is a pain though, esp since most of the time prices aren't even released.
Mergermarket.. hate it though.
mergermarket for acquisition price. double check their LTM EBITDA. sometimes it pulls only FY. Spot check with CapIQ and Factset. sometimes check LCD comps if there is financing, you can pull EBITDA from there.
What is LCD?
Thanks for the advice on Cap IQ I'll try that out.
CapIQ and sometimes run into the same issue. Set a transaction value >0 or whichever specific multiple you're looking for >0.
Would a different source make a difference? I assumed CapIQ didn't have the multiple because it wasn't published and therefore no other database would.
Sometimes (rarely) if you do some digging into press releases and/or filings you can find something CapIQ missed.
Interesting - thanks
Another source is fairness opinions from public-to-public and public-to-private transactions within the same industry.
Fairness opinions are the DEF14As in the SEC filings right?
Here's a pretty helpful link: http://research.thomsonib.com/help/sec_guide04-03-02.htm
Yes, fairness opinion filed as part of the shareholder proxy
Search in equity research reports if you can't find anything in the company's filings or press releases.
I would look at old books that your bank has done and use a similar methodology as every industry has thier own idea of what is a good comp. My experience is limited to O&G but I usually pick each transaction based on asset composition, geographical location or geological formation.
Fariness opinions are in the 14d-9 I just realised.
Most user friendly Platform out there is PitchBook. Has M&A comps, better tagging for streamlined comparables and includes the whole ecosystem - VC, PE, M&A and Public.
Have you given them a go?
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