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The Comprehensive Guide to the Use and Application of Transaction Databases, Third Edition

The Comprehensive Guide to the Use and Application of Transaction Databases, Third Edition

Transactional databases provide analysts and businesses of all kinds with a wealth of information about the prices of privately held companies. When determining the value of a particular company, transactional databases are one place analysts look to derive indications of the price at which buyers and sellers might converge.

The newly expanded edition of Comprehensive Guide to the Use and Application of Transaction Databases, is the go-to resource for anyone who relies on the market approach. Heidi Walker covers the most popular transaction databases including Pratt’s Stats, BIZCOMPS, S&P Capital IQ, and many more, plus she analyzes rules of thumb, prior transactions, and other market indications of value.

Highlights of this Guide include:

Clear explanations of the differences between the most commonly used transaction databases - and how to avoid common traps
Key concepts in applying valuation multiples, most notably invested capital versus equity (and related pricing multiples) and how each of the databases handles liabilities
Thorough analysis of the most popular and well-regarded transaction databases
User friendly format allows easy comparison across databases


INTRODUCTION
Putting the Transaction Method in Context
Public Companies Versus Private Companies
Ways of Estimating Rates of Return
Why Use Transactional Databases?
Advantages of the Use of Transaction Data
Disadvantages of the Use of Transaction Data
Databases Included in This Text
CHAPTER 1. DEFINING MARKET VALUE MULTIPLES
CHAPTER 2. PRATT’S STATS—PRIVATE COMPANY MERGER AND ACQUISITION TRANSACTION DATABASE
Overview
Accessing the Data
Sample Transaction Report
What Is Included in the Transaction Data?
Assets and Liabilities Assumed to Be Transferred in an Asset Sale and a Stock Sale
Special Issues Regarding the Use of Pratt’s Stats Data
General Steps to Follow When Using Pratt’s Stats Transactions
Gathering Pratt’s Stats Transaction Data for the Lawn and Garden Services Industry
Gathering Pratt’s Stats Transaction Data for the Commercial Printing Industry
CHAPTER 3. PUBLIC STATS—PUBLIC COMPANY MERGERS AND ACQUISITIONS TRANSACTION DATABASE
Overview
Accessing the Data
Sample Transaction Report
What Is Included in the Transaction Data?
Assets and Liabilities Assumed to Be Transferred in an Asset Sale and a Stock Sale
Special Issues Regarding Use of Public Stats
General Steps to Follow When Using Public Stats
Gathering Public Stats Data for Software Industry
CHAPTER 4. BIZCOMPS
Overview
Accessing the Data
Sample Transaction Report
What Is Included in the Transaction Data?
Assets Assumed Transferred by Use of BIZCOMPS Multiples
Special Issues Regarding Use of BIZCOMPS Data
General Steps to Follow When Using BIZCOMPS Data
Gathering BIZCOMPS Transaction Data for the Lawn and Garden Services Industry
CHAPTER 5. IBA MARKET DATA
Overview
Accessing the Data
Sample Transaction Report
What Is Included in the Transaction Data?
Assets and Liabilities Assumed to Be Transferred
Special Issues Regarding Use of IBA Market Data
General Steps to Follow When Using IBA Market Data.
Gathering IBA Market Data for the Lawn and Garden Services Industry
CHAPTER 6. FACTSET’S MERGER AND ACQUISITION DATABASE
Overview
Accessing the Data
Sample Deal Report
What Is Included in the Transaction Data?
Assets and Liabilities Assumed to Be Transferred in Deals Reported by FactSet
Special Issues Regarding Use of FactSet Data.
General Steps to Follow When Using FactSet Data
Gathering FactSet Deal Report Data for the Commercial Printing Industry
CHAPTER 7. DONEDEALS
Overview
Accessing the Data
Sample Report
What Is Included in the Transaction Data?
Assets and Liabilities Assumed to Be Transferred in Deals Reported by DoneDeals
Special Issues Regarding Use of DoneDeals Data
General Steps to Follow When Using DoneDeals Data
Gathering DoneDeals Transaction Data for the Commercial Printing Industry
CHAPTER 8. S&P CAPITAL IQ
Overview
Accessing the Data
Sample Transaction Report
What Is Included in the Transaction Data?
Assets and Liabilities Assumed to Be Transferred in Deals Reported by S&P Capital IQ
Special Issues Regarding Use of S&P Capital IQ Data
General Steps to Follow When Using S&P Capital IQ
Gathering S&P Capital IQ Transaction Data for the Commercial Printing Industry
CHAPTER 9. GF DATA
Overview
Accessing the Data
Sample Data
Definitions
CHAPTER 10. KTMINE
Overview
Accessing the Data
Sample Transaction Report
What Is Included in the Transaction Data?
General Steps to Follow When Using the Data
Gathering Transaction Data for a Valuation Assignment
CHAPTER 11. RULES OF THUMB AND PRIOR TRANSACTIONS OF COMPANY STOCK
Rules of Thumb
Prior Transactions of the Subject Company
CHAPTER 12. COMMON ERRORS AND ISSUES IN THE APPLICATION OF TRANSACTION DATA
Introduction
Reporting Differences
Liabilities Assumed
Broaden the Search.
Applying the Multiple: To What Measure of Historical or Future Results?
Growth and Volatility
Earnouts
Covenants Not to Compete
Read the Transaction Report
Always Calculate Your Own Multiples
Verify Target Business Description and SIC Code
Review Deal-Related SEC Filings
The Importance of Asset Data
Be Careful to Review Valuation Software Output
Don’t ‘Cherry-Pick’
APPENDIX. COMPARE APPLES TO APPLES: INVESTIGATING THE DIFFERENCES IN TRANSACTIONAL DATABASES
IBA vs. BIZCOMPS
IBA vs. Pratt’s Stats
BIZCOMPS vs. Pratt’s Stats
Seller’s Discretionary Earnings (SDE)
Stock Sales
INDEX

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