Precedent Transaction Analysis (Deal Comps)

A valuation method benchmarking a target against actual acquisition multiples paid in comparable past M&A transactions in the same sector.

Buyer Example

Buyer evaluating a Salem foundry business researches three comparable Indian foundry acquisitions from the past 24 months, transacted at 5-6.5x EBITDA, and uses the lower end of that range to justify a 5.2x opening offer, arguing the target's customer concentration is worse than the precedent deals.