Comparative method

The comparative method (or market approach) is the family of business valuation techniques that derive value by reference to observable market prices — listed company multiples or transaction multiples. It provides a market-anchored valuation perspective, directly reflecting what investors are currently willing to pay for comparable businesses. Its two main variants are the listed company multiples method and the transaction multiples method, each with specific selection criteria, adjustment requirements and reliability characteristics depending on market conditions and data availability.

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Example: Hectelion applies the comparative method to value a Swiss industrial holding company using 8 listed sector comparables (EV/EBITDA median: 7.2x) and 6 recent M&A transactions (EV/EBITDA median: 8.1x). Applied to a normalised EBITDA of CHF 3.5 million, the method produces a range of CHF 25.2–28.4 million — triangulated against the DCF output of CHF 26.8 million to confirm the valuation conclusion.

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Hectelion uses the comparative method as a systematic market anchor in all valuation engagements, combined with intrinsic DCF analysis for triangulation.