Question
Shin-up is a social media site that is growing in popularity. The firm has been around for a few years and has created a nice
Shin-up is a social media site that is growing in popularity. The firm has been around for a few years and has created a nice market niche for itself. Now the company has a possible buyer who has made an offer. The CEO of Shin-up is your friend and has asked for your help in calculating the value of the company by using relative valuation with multiples from comparable companies. Last years Sales for Shin-up was $645 million and it had an EBITDA of $96.75 million.
Using the data provided, what is your estimate of the Price for Shin-up using the Sales multiple?
For that, you have collected the following data on social media companies:
| PRECEDENT TRANSACTIONS ANALYSIS |
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| All figures are in $000's |
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| Target Company | Date | Sales | EBITDA | EBITDA/Sales | Price |
| AAA | 2008 | $1,200,000 | $312,000 | 26.00% | $3,744,000 |
| ZZZ | 2009 | 800,000 | 144,000 | 18.00% | $1,584,000 |
| LLL | 2012 | 5,600,000 | 336,000 | 6.00% | $3,024,000 |
| DDD | 2016 | 480,000 | 67,200 | 14.00% | $672,000 |
| CCC | 2019 | 975,000 | 87,750 | 9.00% | $702,000 |
a. $967.5 million
b. $1,945.2 million
c. $1,001.04 million
d.$1,552 million
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The Financial Times Guide To Technical Analysis How To Trade Like A Professional
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