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Earnings valuation

Earnings valuation

Does anyone have any knowledge of typical P/E ratios currently being used in business earnings valuations?  I know that business valuation is not a precise science(!), but I am trying to get an idea of the sort of earnings multipliers being used in disposal negotiations in the current market.

The particular business I am interested in, is privately owned, based in the North of England and operates in the construction industry.  The shareholding in question is a minority holding, so it would also be very helpful if anyone has experience of typical P/E ratio discounts which might be applied for a minority shareholding.

I have commissioned and received a valuation of the shareholding, which has used one P/E ratio. However that P/E ratio differs wildly from the ratio being quoted by the 3rd party.

To reiterate, I know there is no right and wrong answer to this question, and any deal will only be done if the potential buyer and seller can agree a price for the shares.  Nonetheless it would be very helpful to get some view on typical P/E ratios which might be applicable in the current market.

Many thanks in anticipation.



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05th Dec 2012 21:00

BDO Private Company Price Index

Have you looked at BDO's quarterly survey of private company deal valuations -

Thanks (1)
By neilfo
to stepurhan
06th Dec 2012 11:32

No, I wasn't aware of that survey Paul - that is very helpful, thank you.

However, I'd still be very interested in anyone else's views or experiences to supplement that information.




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