Transaction multiples method

The transaction multiples method values a company using multiples extracted from recent comparable M&A transactions — EV/EBITDA, EV/Revenue — applied to the target's normalised financial performance. Unlike trading multiples (minority, liquid pricing), transaction multiples incorporate a control premium and reflect actual M&A market conditions. They are typically 15–30% above trading multiples for the same sector. Their availability is more limited (private transactions are not always disclosed), but specialised databases (Capital IQ, Mergermarket) enable construction of relevant comparable panels.

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Example: Hectelion compiles 12 recent transactions in the Franco-Swiss industrial sector — median EV/EBITDA of 7.8x over 3 years. Applied to CHF 2.5 million normalised EBITDA, the transaction multiple implies CHF 19.5 million enterprise value — 14% above the trading multiples result (CHF 17.1 million at 5.76x adjusted), with the gap reflecting the control premium implicit in completed transactions.

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Hectelion builds transaction comparable panels from proprietary and public databases to anchor valuations in real M&A market data rather than theoretical listed company prices.