EBITDA Multiples
The multiples method compares your company with similar transactions. EBITDA × sector multiple = rough company value. Typical for mid-market and many PE transactions. The art lies in EBITDA adjustment and choosing comparable values.
Typical multiples in the German mid-market range from 5x to 12x adjusted EBITDA depending on sector and growth. The range shows: valuation is not an exact science.
DCF Method (Discounted Cash Flow)
The DCF approach projects free cashflows and discounts them to present value. Especially suitable for companies with clearly planable growth. Requires sound assumptions – often supplemented by multiples check.
Practice: both methods in view
Experienced buyers and advisors use both approaches. The range of results provides negotiation room. For sellers, understanding the logic is key.