Precedent transactions
Valuation from the multiples of completed acquisitions of similar companies rather than from the quotes of listed peers.
How to read the number
Reflects the price at which control changes hands, and is therefore usually above the exchange valuation of the same business.
When the metric lies
Deals are rare and heterogeneous: terms, synergies and market timing differ in each. A small sample makes the median unstable.
Also known as: transaction multiples