Which Multiples Matter in M&A? An Overview

Abstract

This paper provides an overview of valuation multiples in M&A advisory. I review prior literature and legal controversies and the theoretical basis for their role. I then standardize all the advisor multiples available in SDC Platinum along four dimensions, and report rich descriptive statistics on each dimension over time and across industries. I highlight seven findings that are notable in light of current research and debates, and identify opportunities for future research. This paper answers the call from Gow, Larcker, and Reiss (2016) for thorough descriptive research, to provide a foundation and prompts for future hypothesis development and tests.