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Chapter 12. Market Approach-M&A Method

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The following is an excerpt from The Executive's Guide to Business Valuation by valuation expert and M&A advisor Justin Kuczmarski, MBA, CPA, CVA, CIRA, ABV. To view this free, 300-page guidebook, please click the blue link above to download.

 

Differences between M&A Method and Public Company Method

 

There are four major differences between both leading market approach methods. Chapter 10 previously introduced the first two of these key distinctions.

 

Difference # 1: M&A Method Focuses on Actual Transactions

 

The first difference is how the Public Company Method exclusively involves analyzing public companies. The M&A Method, on the other hand, performs a different search. A valuator performing the M&A Method achieves this by analyzing actual transactions rather than public company proxies.

 

Difference # 2: M&A Method Focuses on Public and Private Data

In addition, the second difference arises from the M&A Method incorporating market multiples across both public and private data instead of solely benchmarking public company information. The following charts summarize these key distinctions.

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