What is Market-Based Valuation?
Market-based valuation determines your business worth by analysing what similar businesses have sold for. Using databases of Australian business sales and M&A transactions, we apply industry multiples to establish a market-derived value range that reflects what buyers are actually paying.
How Does Market-Based Valuation Work?
Market-based valuation determines business worth by analysing what similar businesses have sold for in the marketplace. This approach reflects real-world buyer behaviour and current market conditions in your industry.
We access comprehensive databases of Australian business sales and M&A transactions to identify relevant comparables. By applying appropriate multiples (revenue, EBITDA, earnings) we establish a market-derived value range.
This method is particularly compelling for business sales negotiations as it demonstrates what buyers are actually paying for similar businesses in the current market.
From $3,500
Starting price
2-3 Weeks
Typical timeline
30-45 Pages
Report length
What Are the Key Benefits?
- Based on real market transactions
- Reflects current market conditions
- Easy to understand methodology
- Industry-specific comparisons
- Highly credible for negotiations
- Benchmarking against competitors
- Supports price expectations
Who Should Use This Method?
- Business sale preparation
- Acquisition target assessment
- Partnership buyouts
- Shareholder disputes
- Setting realistic price expectations
- Market positioning analysis
What Methodologies Do We Use?
Comparable Company Analysis
Identifies publicly traded companies with similar characteristics (size, industry, growth, profitability) and applies their trading multiples to your business metrics after appropriate adjustments for size and marketability.
Precedent Transaction Analysis
Analyses recent M&A transactions involving similar businesses. We adjust for transaction-specific factors like control premiums, synergies, and market timing to derive applicable multiples.
Industry Multiple Benchmarking
Applies industry-specific valuation multiples (Revenue, EBITDA, EBIT, SDE) derived from our database of Australian SME transactions. Accounts for industry norms and regional factors.
Rules of Thumb Analysis
Cross-references against industry rules of thumb commonly used by brokers and buyers. While not standalone, these provide useful sanity checks on primary valuation conclusions.
What's Included in Your Report?
Market Research
- Industry analysis
- Comparable company selection
- Transaction database search
- Multiple derivation
Valuation Analysis
- Revenue multiples
- EBITDA/EBIT multiples
- Size and risk adjustments
- Control premium analysis
Documentation
- Executive summary
- Comparable transaction details
- Multiple selection rationale
- Value range conclusion
Common Questions About Market-Based Valuation
People Also Ask About Market-Based Valuation
Common SME multiples include Revenue (0.3-2x), EBITDA (2-5x), and SDE (1.5-3.5x for owner-operated businesses). Multiples vary significantly by industry, growth rate, profitability, and customer concentration.
We access Australian business sale databases (BizExchange, industry associations), analyse ASX transactions, review private equity deals, and leverage our proprietary deal network. We select comparables by industry, size, location, and business model.
A control premium is the additional amount paid above minority share value to acquire a controlling interest (typically 51%+). It typically ranges 20-40% for private companies and reflects the value of decision-making authority over the business.
Smaller businesses face higher perceived risk: key person dependency, customer concentration, limited management depth, and reduced negotiating power. Size discounts of 20-40% are common when comparing to larger comparable transactions.
We prioritise transactions from the last 2-3 years to reflect current market conditions. Older transactions are adjusted for market changes, economic conditions, and industry trends. Recent data provides the most reliable market indicators.
Related Industry Valuations
Related Valuation Methods
Ready to Get Started?
Contact us for a free consultation to discuss your market-based valuation needs and receive a custom quote.