M&A: The Role of Growth in Valuing a Private Company

A company’s ability to grow is paramount in the minds of Buyers.  The greater the prospects of growth, the greater the multiple, and the greater the price.  And vice versa. 

The best indicator of growth is “proof in the pudding,” i.e., historical growth leading right up to the present.  Without past growth, you can make the case, and should make the case if it exists, that it is all going to change going forward, but this is a steep uphill battle.

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