EBITDA-Multiples: The Easy Way to Determine Enterprise Values?
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EBITDA-Multiples: The Easy Way to Determine Enterprise Values?

The most common way to determine an enterprise value is to use a multiple of the EBITDA. When a deal is closed, both parties know the enterprise value and the EBITDA. Determining this multiple seems like a simple exercise and in many countries they are published in trade magazines. How useful are these figures?

A simple international comparison

In Germany, the ‘Finance Magazin’ website publishes market multiples and in the Netherlands, ‘Brookz’ offers the same kind of information. When comparing these two sources, it could be concluded that the average software company in Germany has a 30% higher enterprise value than its Dutch competitor. Is this comparison fair?

Do all M&A-advisers use the same conditions?

Tools like these should never be used without the proper expertise and disclaimers. The first consideration is the quality of the sources. In both cases a variety of M&A specialists deliver their multiples realised in recent transactions. But not all the sources use the same methods. Which EBITDA is used?

  • Last fiscal year?
  • Last twelve months?
  • Running forecast or an average of several years?
  • And how do they deal with, for instance, on-balance real estate? This has a major influence on the EBITDA.

Then there is the discussion around defining the industry. One adviser might consider Amazon a retail company and another would qualify them as an IT company. The impact? The market multiple for IT is twice as high as for retail. This lack of clear definitions and control makes the final averages “wobbly” to say the least, explain the experts from Ecovis cooperation partner Taurus Corporate Finance.

A correct enterprise valuation must always be created individually. We can support you with this.
Mark Eenink, Managing Director, Taurus Corporate Finance*, Deventer, Netherlands


According to Taurus Corporate Finance, one of the most important issues for M&A advisers is to manage expectations. An M&A process needs to be properly managed. But when shareholders have unreal price expectations, they may take some convincing before the start of the process.


A good business valuation requires thorough research and customisation. Without exception. Averages may be useful, but only with proper use and in comparison to other methods. A certified business valuator creates a variety of valuations and determines ranges.

A comparison for the housing market is easily made. There is always an average for the prices of detached houses in a certain region, but only a real estate adviser who does many transactions is able to make a fair comparison to other propositions in the market. That is his profession. It is the same with a business valuation. What is needed is a rock-solid, substantiated valuation tailored to a specific situation. An EBITDA-multiple is a first indication.

For further information please contact:

Mark Eenink, Managing Director, Taurus Corporate Finance*, Deventer, Netherlands
Email: m.eenink@taurus.nl

*ECOVIS International cooperates with Taurus Corporate Finance, a Netherlands based Corporate Finance firm with office in Deventer.

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Contact us:

Mark Eenink
Taurus Corporate Finance*
Bergweidedijk 22
7418 AA Deventer
Phone: +31 570 660890