Valuation methodology: a dry topic? It’s actually been at the heart of some the highest profile PE stories of the past couple of years. WeWork raised some snickers back in April 2018 when it introduced prospective bond investors to “community-adjusted EBITDA” (explained here by the Financial Times). More broadly the practice of EBITDA addbacks has left some investors feeling incredulous, as this well read deep dive revealed. The downfall of the Abraaj Group also had valuations at its heart. Among the many allegations made by US prosecutors last year against senior execs of the firm, reported by sister publication Secondaries Investor, was that they increasingly sought an “uplift” to valuations despite strong resistance from junior investment team members.
Obviously there will be lots of discussion around this at the CFOs and COOs Forum in New York this week. Before that kicks off though, we’re chairing a roundtable discussion on valuations, featuring expert advisers and top flight CFOs from both the mega and the mid-market. Let us know what you’d like Toby Mitchenall to ask at email@example.com.