Amerimark Capital Corporation has extensive experience in valuing privately held companies. We provide valuation support for Employee Stock Ownership Plans (ESOPs), sale of businesses, pre-acquisition screening, buy/sell agreements and estate planning.

   Pricing Guidelines

Pricing a privately held company is a combination of science and art that requires experience and skill. The following pricing guidelines should be used for information only. Actual pricing requires an in-depth analysis of your particular situation.

   Multiple of Cash Flow

Profitable, low to moderate technology manufacturing, distribution and service to industry companies are selling for 4 to 6 times EBITDA (earnings before interest, taxes, depreciation, and amortization), less debt. Profitability, industry, future outlook and other factors may cause the company to sell for more or less.

   Multiple of Stockholders' Equity

Stockholders' equity will tend to support the price indicated by cash flow but acquirers will not pay for assets not supported by cash flow. Unprofitable companies tend to sell from .5 to 1 times stockholders' equity.

   Multiple of Sales

Some industries price businesses as a multiple of sales. For obvious reasons, this is usually a poor reflection of true value. It is most useful in industries where margins are consistent.

   Discounted Cash Flow

Discounted cash flow forecasts a series of future cash flows and discounts them to determine a net present value. The technique is useful in developing a singular price for ESOPs, etc. Accuracy depends on several factors, including forecast, discount rate, and capitalization rate.

Contact a professional for an accurate valuation of your company. Most quality investment bankers will provide you an estimated price range without additional charges.

Click here to contact Amerimark Capital for assistance in determining the value of your company.