Valuation
Pick the comps
You are building trading comps for a mid-market packaging company growing 4% a year. The MD has asked you to 'make sure the software-enabled names are in there'. They trade at 18x EBITDA against 9x for the rest of the set.
All simulators
Valuation, sale processes and the success fee
Investment Banking simulator
Your seat: M&A team, bulge-bracket and elite-boutique advisory
Pitch a number, win the mandate, run the auction. Sellers hire the highest valuation; buyers pay what their own maths allows. You only get paid if the two meet, and your team's hours run out.
What you'll learn
- How comps, precedents and DCF each mislead, and what buyers can really pay
- Why a stock deal is accretive or dilutive, and why that isn't the same as creating value
- How broad and targeted auctions, exclusivity and conflicts decide who signs
Who it's for
M&A, coverage and corporate development candidates. The classic analyst seat.
It works as interview prep: you'll have made the calls an interviewer asks about, and seen what happens when you get them wrong.
Decisions from your first year
Three calls a year. Here's the kind of thing that lands on your desk before your first promotion.
Valuation
Precedents from a different market
The best precedent transactions for your client's sector were struck in a hot market at 15x EBITDA. Trading comps today say 10x. The client has read about the 15x deals.
Sale process
Who gets the teaser?
A founder-owned business is selling. Three customers make up half its revenue, and two of its competitors are natural buyers. The founder is terrified of a leak.
The ladder
Each rank has its own bar for returns and standing. Clear both to move up.
- Analyst
- Associate
- Vice President
- Director
- Managing Director
- Group Head
Terms you'll use
- Trading comparables
- What similar listed companies trade at, as multiples of earnings.
- Precedent transactions
- Multiples paid in past acquisitions of similar companies.
- Accretion / dilution
- Whether an acquisition raises or lowers the buyer's earnings per share.
- Synergies
- Cost savings or extra revenue from combining two businesses.
- Fairness opinion
- A bank's opinion that a price is fair, financially, to a company's holders.
- Exclusivity
- A period when a seller negotiates with one bidder only.