M&A Activity -- Expect a Surge in Mergers

A company, for example, may have a total enterprise value of $10 million. If this company has $3 million in funded debt, the shareholder will receive $7 million for his equity at closing.

Buyers and valuators derive enterprise value by applying a multiple to normalized EBITDA. The present range of multiples in the printing industry is from 3.0 times to as much as 5.5 times for the most desirable targets. Multiples can vary widely from one printing segment to another, so do not expect, simply because you love your "enormously desirable," $7 million, unionized, commercial sheetfed printing company, that your valuation will be assigned a multiple at the high end of the range.