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Do buyers buy private companies based on EBITDA, PE or Price vs. Book Value?

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Do buyers buy private companies based on EBITDA, PE or Price vs. Book Value?

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Generally buyers determine a company’s prospects on the basis of recent results, growth opportunities, overall company quality, as well as on a multiple of EBITDA common for that industry at the time of sale. PE is not a relevant metric for valuing private companies, and book value is not an accurate reflection of a business’ worth in the marketplace.

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