Valuation & Finance

Customer Concentration Discount

A valuation markdown applied when a disproportionate share of a target's revenue depends on one or few customers, reflecting elevated revenue-loss risk post-acquisition.

Buyer Example

Buyer discovers a Faridabad auto-parts supplier derives 55% of revenue from a single OEM. Buyer applies a 15% valuation discount to the headline 6x EBITDA offer and additionally requires a 12-month indemnity-backed revenue guarantee tied to that OEM contract's continuation, rather than relying on the multiple discount alone.