How Applications Cross the Chasm to Valuations, Part Ⅱ of Ⅱ

摘要

The motivations of mainstream buyers looking for acquisitions are to increase market share, enter new markets (vertical or horizontal) and increase sales performance through cross selling of products to established customers. Valuation models for privately-held companies focus heavily on historical and projected financial performance using comparable public company performance, comparable transactions and discounted cash flow as the norm for determining the value of the target company. Multiples applied to the training twelve months ("TTM") vary by industry sector and the recent financial trends of the acquired company. In today's world of M&A, you can expect to see multiples of 5x to 7x TTM sales in hot markets, tailing off to 2x to 3x TTM sales in growing market segments with as little as 1x TTM on sales for more mature segments.