This summer the Ipreo Blog has been leveraging the expertise of our Private Capital Markets (PCM) group as part of our ongoing mission to feature insight and analysis from across Ipreo’s different business units.
We’ve featured a three-part interview with Kevin Black, EVP of Global Private Capital Markets, explored ideal holding periods, and last week we kicked off a series on volatility with a piece about how it impacts private company valuation.
Today, we turn to one of our experts within the private capital markets space for a discussion of one of the ways Ipreo PCM attempts to determine the enterprise value of an entity.
David Mesner, a Valuation Analyst with Ipreo (PCM) specializing in business and securities valuation engagements for corporate finance, financial reporting, and tax purposes, discusses the GPC approach below.
The multiples in the GPC approach are applied to revenue and EBITDA, and weighting for each indication is separated between these two data points. Typically, weighting is also separated by historical versus projected figures. Significant revenue can be reached at different levels based on the subject company’s operating sector and overall stage of development, but a good rule of thumb is that it’s reached around the $7.5 – $10 million mark.
Read the full Special Report – Weighing in on the Market Approach: What Holds Water?