Precedent transaction analysis values a business by reference to the prices actually paid in comparable completed deals — the market approach’s deal-specific cousin, distinct from applying a public-company trading multiple.
Precedent transaction analysis values a business against the prices actually paid in comparable completed deals — the market approach’s deal-specific cousin, distinct from applying a public-company trading multiple. In Canada it runs into a real data problem: private-company transaction terms are typically confidential and are not systematically published anywhere, unlike the deal-comp databases available for larger, US-listed transactions. CBV Institute’s own description of its members’ scope confirms this work happens inside individual engagements rather than off a public feed — Chartered Business Valuators are engaged for “mergers, acquisitions and divestitures, including valuation analyses and associated services” and “impairment testing and purchase price allocations” (CBV Institute).
It is worth being precise about what deavo’s published sector multiples are not: they are not a precedent-transaction data set. Deavo states plainly that its “ranges draw on Statistics Canada and ISED small-business statistics” (source), which is aggregate small-business data, not the record of what was actually paid in a set of individual completed deals. Any sponsor citing deavo’s medians in a precedent-transaction section of an investment memo is misdescribing the source.
A fund comparing pricing across three of its own past bolt-ons in the same sub-sector — $4.1M at 5.8× EBITDA, $6.0M at 6.4× EBITDA, $3.2M at 5.1× EBITDA — builds its precedent-transaction view from its own closed deals rather than any published external benchmark, because no public Canadian deal-comp set exists at this size and sector. Its own transaction history becomes the only precedent set the investment committee can actually defend.
See also: Multiple of earnings · Quality of earnings report · Enterprise value.
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