Private Equity: Valuation
As we discussed in Part I and Part II of this series, private equity firms value a number of quantitative and qualitative factors when purchasing a business. In Part III, we will discuss the valuation side of the equation. Because most private equity firms are seeking out quality firms with potential to scale, quantitatively PE firms will desire companies with the following qualities:
- Predictable and sustainable revenue
- Predictable cash flows, and
- Potential for multiple arbitrage.
ARCHIVES
Private Equity: Characteristics (February 2022)
Private Equity: An Introduction (January 2022)
A Year-End Checklist for Owners (December 2021)
The State of Owner Readiness (November 2021)
The GRAPES of Value (October 2021)
The State of the M&A Market (2021 Q2) (September 2021)
A Story of Four Owners (August 2021)
A Deeper Dive Into The Market Approach (August 2021)
The Three Primary Methods of Valuing a Business (July 2021)
The Two Big Value Killers (And How to Address Them) (May 2021)
Get a Grip On Your Cash Flows (March 2021)
Grow Your Business With An Exit in Mind (February 2021)
Middle Market M&A-A Summary of 2020 and Outlook for 2021 (January 2021)
What are the Five Things You Should do Next Year to Improve Value (December 2020)
A Holistic Approach to Owner Management Part III (November 2020)
A Holistic Approach to Owner Management Part II (November 2020)
A Holistic Approach to Owner Management Part I (October 2020)
What We Can Learn About The State of Owner Readiness (October 2020)
The Three Things Every Exit Plan Must Consider (September 2020)
The Five Stages of Value Maturity (September 2020)