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 Associate:
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.

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 Associate:
Another 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 Analyst:
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.

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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.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 
duffmt6:

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 is a life saver. It is a pain though, esp since most of the time prices aren't even released.

Currently: future neurologist, current psychotherapist Previously: investor relations (top consulting firm), M&A consulting (Big 4), M&A banking (MM)
 
tmb41:

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.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 
duffmt6:

Sometimes (rarely) if you do some digging into press releases and/or filings you can find something CapIQ missed.

This is true - visit the company's investor relations section on their site too (as opposed to just general press releases); sometimes has info that CIQ doesn't have. I've found some tranx prices in PDF'ed 10-q reports before
Currently: future neurologist, current psychotherapist Previously: investor relations (top consulting firm), M&A consulting (Big 4), M&A banking (MM)
 

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