Consolidation--Moguls of M&A

PI: What formula do you use to place a value on a company?

Tevis: Depending on age of the equipment and the depth of the customer list, the multiple range is from 4.5 to 5.5 times EBITDA. Share price accretion does not work if we get to six times or beyond.

While we are privately held, our shareholders look at the arbitrage value of a public company to determine our overall valuation. Deals more expensive than 5.5 multiples make it difficult to add to long-term shareholder value.