Jun 27, 2018 – A Practical Guide to the Intricacies of the M&A Valuation of Tech Companies
News by Ascento Capital • June 27, 2018
The theoretical metrics of company valuations are well known: compare similar public companies, review precedent M&A transactions and throw in a discounted cash flow (DCF) model for good measure. Then how does this theoretical valuation model account for Facebook’s acquisition of WhatsApp in 2014 for $19 billion when WhatsApp had $20 million in revenue, a 950x revenue multiple? Why is Airbnb worth $31 billion, which is more than Hilton at $27 billion. Why is Uber worth $72 billion, which is more than GM at $58 billion?