Valuation & Finance
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.
Seller Example
Promoter of a Salem foundry business pushes back on the buyer's precedent transaction comps, pointing out that two of the three cited deals were distressed sales under time pressure, and successfully argues that a clean, non-distressed process justifies pricing at the 6.5x upper end of the precedent range instead of the buyer's cherry-picked 5.2x.