The market approach aims to establish the value of a companybased on how similar firms are priced on the stock exchange orthrough company transactions. Using the market approach,price-related indicators such as price to earnings, sales and bookvalues are utilised. An ever-present problem however, is thatdifferent valuation multiples and valuation methodologies tend toprovide the analyst with contradictory outputs. The solution tothis problem so far has been to claim that the market approach ismore art than science, thus providing the analyst with the freedomto alter the multiples at their own discretion to reach a uniformvalue or range.
Valuation: The Market Approach puts an end to thisproblem, providing the reader with a rational scientific-basedunderstanding and the necessary tools to perform a sound marketapproach valuation, or if reviewing such valuations, provide thetools to challenge the work of the arts-based senior experts.
The book begins with an in-depth review of the basics; which isthen applied in a detailed worked example. Step-by-step, thereader's expertise is built towards a complete understandingand implementation of the market approach, not only on a standalonebasis but also in relation to the DCF methodology.
The book is aimed at the seasoned professional, but will also beinvaluable to students as they apply their academic knowledge tothe real world of valuation and M&A.
About the author:
SETH BERNSTROM is a Director at the Valuations practice of PwC.He has 15 years of experience as a valuation expert with a specialfocus on private equity, with long-running engagements in Valuationfor some of the leading Nordic private equity houses. Additionally,he provides valuation support and valuation-related advisoryservices to large and medium-sized Nordic and (Nordic-based) globalcompanies. In addition to his regular work at PwC, he also acts asVisiting Lecturer on valuation at KTH Royal Institute of Technologyin Stockholm. Furthermore, he often gives lectures and seminars onvaluation at other leading Nordic universities, investment banks,companies, and organizations. He holds a Master of Science inBusiness Administration and Economics from the Stockholm UniversitySchool of Business.