Multiple

A multiple is a financial ratio expressing company value (enterprise value or equity value) relative to a performance metric — EBITDA, EBIT, revenue, net income. The most common M&A multiples are EV/EBITDA, EV/Revenue and PER. They serve as benchmarks in comparable valuations: a multiple observed for similar companies is applied to the target's normalised financial aggregate to derive a reference value. An EV/EBITDA multiple of 7x means the buyer pays 7 times the target's operating profit before depreciation. Multiple selection and justification are critical steps in every valuation report.

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Example: a Swiss industrial SME is valued on a 7.5x EV/EBITDA multiple — close to the sector median of 7.2x with a 4% premium justified by above-sector margins. Applied to normalised EBITDA of CHF 2.5 million, enterprise value is CHF 18.75 million. After deducting net financial debt of CHF 3.5 million, the equity value paid to selling shareholders is CHF 15.25 million.

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At Hectelion, multiples retained in every valuation are selected and justified by reference to documented comparable panels — a key requirement for conclusions defensible before auditors, courts and tax authorities.